Financial Statements with Independent Auditors' Report — Community Health Partners, Inc. (April 30, 2024)
Summary
Financial Statements and Supplementary Information with Independent Auditors' Report for Community Health Partners, Inc., Livingston, Montana, as of April 30, 2024, and June 30, 2023. The table of contents lists financial statements, a Schedule of Expenditures of Federal Awards, reports on internal control and compliance, a Schedule of Findings and Questioned Costs and a Corrective Action Plan. The notes describe the Clinic as a nonprofit health care entity receiving revenues from Medicare, Medicaid, private insurance carriers, individuals, private grants and government grants. The Corrective Action Plan lists items under the Department of Health and Human Services Health Centers Cluster and states that as of 5/1/2024 Community Health Partners merged with One Health.
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“Financial Statements with Independent Auditors' Report — Community Health Partners, Inc. (April 30, 2024).”
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Community Health Partners, Inc.
Livingston, Montana
FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION WITH
INDEPENDENT AUDITORS’ REPORT
April 30, 2024, and June 30, 2023
Community Health Partners, Inc.
TABLE OF CONTENTS
April 30, 2024, and June 30, 2023
Page
Number
Independent Auditors’ Report 1
FINANCIAL SECTION
Statements of Financial Position 5
Statements of Activities 7
Statements of Functional Expenses 8
Statements of Cash Flows 10
Notes to the Financial Statements 12
OTHER SUPPLEMENTARY INFORMATION SECTION
Schedule of Expenditures of Federal Awards 27
Notes to the Schedule of Expenditures of Federal Awards 28
OTHER REPORTS SECTION
Independent Auditors’ Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards 30
Independent Auditors’ Report on Compliance for Each Major Program and Report
on Internal Control Over Compliance in Accordance With the
Uniform Guidance 32
FINDINGS AND QUESTIONED COSTS SECTION
Schedule of Findings and Questioned Costs 36
Summary Schedule of Prior-Year Audit Findings 41
Corrective Action Plan 42
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Community Health Partners, Inc.
Livingston, Montana
Report on the Financial Statements
Opinion
We have audited the accompanying financial statements of Community Health Partners, Inc., a
nonprofit health care entity (the Clinic), which comprise the statements of financial position as of
April 30, 2024, and June 30, 2023; the related statements of activities, functional expenses, and
cash flows for the period July 1, 2023, through April 30, 2024, and year ended June 30, 2023; and
the related notes to the financial statements.
In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Clinic as of April 30, 2024, and June 30, 2023, and the changes in its net assets and
its cash flows for the period and year then ended in accordance with accounting principles
generally accepted in the United States of America (GAAP).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditors’ Responsibilities for
the Audit of the Financial Statements section of our report. We are required to be independent
of Community Health Partners, Inc. and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements
in accordance with GAAP, and for the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Clinic’s
ability to continue as a going concern within one year after the date that the financial statements
are available to be issued.
Page 1
INDEPENDENT AUDITORS’ REPORT
(Continued)
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not absolute assurance, and therefore is not a guarantee that an audit conducted in accordance
with GAAS and Government Auditing Standards will always detect a material misstatement when
it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if
there is a substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive
to those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Clinic’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the
overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the Clinic’s ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control-related matters that we identified during the audit.
Page 2
INDEPENDENT AUDITORS’ REPORT
(Continued)
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a
whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not
a required part of the financial statements. Such information is the responsibility of management
and was derived from, and relates directly to, the underlying accounting and other records used
to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the financial
statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statements or to the financial statements themselves, and other additional procedures in
accordance with GAAS. In our opinion, the information is fairly stated, in all material respects, in
relation to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 4, 2024, on our consideration of the Clinic’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements, and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the effectiveness of the Clinic’s internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering the Clinic’s internal control over financial
reporting and compliance.
December 4, 2024
Great Falls, Montana
Page 3
FINANCIAL SECTION
Community Health Partners, Inc.
STATEMENTS OF FINANCIAL POSITION
April 30 and June 30 2024 2023
ASSETS
Current Assets
Cash and cash equivalents $ 1,654,709 $ 1,120,027
Certificates of deposit 1,197,161 3,014,910
Patient accounts receivable - net 751,334 473,573
Pharmacy accounts receivable 203,265 195,229
Employee retention credit receivable 2,281,251 -
Other receivables 112,684 152,654
Grants receivable 126,164 141,944
Interest receivable 22,085 19,990
Current portion of pledges receivable 26,000 22,333
Inventory 296,170 302,063
Prepaid expenses 104,882 71,063
Total Current Assets 6,775,705 5,513,786
Property and Equipment
Land 320,000 320,000
Buildings 3,990,758 3,984,381
Office equipment 881,644 889,727
Medical equipment 716,072 824,639
Subtotals 5,908,474 6,018,747
Accumulated depreciation (1,971,988) (1,799,987)
Total Property and Equipment 3,936,486 4,218,760
Other Assets
Certificates of deposit 51,700 51,700
Pledges receivable - net of current portion and discount 36,089 72,941
Long-term notes receivable and accrued interest 4,409,163 4,308,775
Computer software - net of accumulated amortization 421,513 611,113
Total Other Assets 4,918,465 5,044,529
TOTAL ASSETS $ 15,630,656 $ 14,777,075
The accompanying notes are an integral part of these financial statements.
Page 5
Community Health Partners, Inc.
STATEMENTS OF FINANCIAL POSITION
(Continued)
April 30 and June 30 2024 2023
LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable $ 553,663 $ 183,697
Accrued compensated absences 263,081 188,280
Accrued wages and payroll liabilities 466,382 198,702
Interest payable 1,519 1,535
Refundable grant advances 13,334 172,360
Current portion of long-term debt 25,195 44,571
Total Current Liabilities 1,323,174 789,145
Long-Term Liabilities
Long-term debt - less current maturities 1,775,944 1,861,404
Closing costs - net of accumulated amortization (13,916) (15,267)
Total Long-Term Liabilities 1,762,028 1,846,137
Total Liabilities 3,085,202 2,635,282
Net Assets
Without donor restrictions:
Board designated 1,492,320 1,543,012
Undesignated 11,025,336 10,548,088
With donor restrictions:
Time or purpose restrictions 27,798 50,693
Total Net Assets 12,545,454 12,141,793
TOTAL LIABILITIES AND NET ASSETS $ 15,630,656 $ 14,777,075
The accompanying notes are an integral part of these financial statements.
Page 6
Community Health Partners, Inc.
STATEMENTS OF ACTIVITIES
Period Ended April 30 and Year Ended June 30 2024 2023
CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS
Revenue
Gross patient services $ 6,699,587 $ 8,969,273
Contractual adjustments (538,488) (947,748)
Provision for bad debt (500,688) (414,340)
Sliding fee discounts (753,715) (818,874)
Net Patient Services 4,906,696 6,788,311
Pharmacy revenue 3,027,308 2,759,651
Cost of goods sold (1,402,861) (1,119,601)
Net Pharmacy Revenue 1,624,447 1,640,050
Grant revenue 3,609,599 6,190,753
Contribution revenue 228,230 431,913
In-kind contributions 48,130 293,127
Other revenue 2,309,240 15,862
Net assets released from restriction 50,693 -
Total Revenue 12,777,035 15,360,016
Expenses
Program services 9,094,503 11,270,038
Management and general 3,302,635 3,693,230
Fundraising 109,841 167,272
Total Expenses 12,506,979 15,130,540
Operating Income 270,056 229,476
Other Income (Expense)
Interest expense (73,046) (71,239)
Loss on disposal of assets - (12,378)
Investment income - net 229,546 198,784
Total Other Income (Expense) 156,500 115,167
NET CHANGE IN NET ASSETS WITHOUT DONOR RESTRICTIONS 426,556 344,643
CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS
Grant revenue 27,798 50,693
Net assets released from restriction (50,693) -
NET CHANGE IN NET ASSETS WITH DONOR RESTRICTIONS (22,895) 50,693
Change in Net Assets 403,661 395,336
Net Assets - Beginning of Year 12,141,793 11,746,457
Net Assets - End of Year $ 12,545,454 $ 12,141,793
The accompanying notes are an integral part of these financial statements.
Page 7
Community Health Partners, Inc.
STATEMENTS OF FUNCTIONAL EXPENSES
Program Management
Period Ended April 30, 2024 Services and General Fundraising Total
Salaries and wages $ 5,644,610 $ 1,651,462 $ 11,261 $ 7,307,333
Advertising - - 13,030 13,030
Amortization 91,357 98,243 - 189,600
Contract services 852,933 102,612 - 955,545
Depreciation 227,909 66,911 - 294,820
Employee benefits 739,561 307,078 862 1,047,501
Insurance - 9,156 - 9,156
Information technology 213,712 152,031 - 365,743
Medical supplies 290,083 - - 290,083
Occupancy 297,352 164,982 - 462,334
Office expenses 38,575 25,103 - 63,678
Other expenses 52,258 367,424 40,000 459,682
Payroll taxes 492,482 125,005 870 618,357
Professional fees 6,973 180,905 43,368 231,246
Retirement plan 138,298 43,242 450 181,990
Travel and training 8,400 8,481 - 16,881
Total $ 9,094,503 $ 3,302,635 $ 109,841 $ 12,506,979
The accompanying notes are an integral part of these financial statements.
Page 8
Community Health Partners, Inc.
STATEMENTS OF FUNCTIONAL EXPENSES
(Continued)
Program Management
Year Ended June 30, 2023 Services and General Fundraising Total
Salaries and wages $ 6,905,507 $ 2,007,172 $ 30,124 $ 8,942,803
Advertising - - 17,635 17,635
Amortization 39,171 89,308 - 128,479
Contract services 1,042,380 554,954 - 1,597,334
Depreciation 311,942 66,738 - 378,680
Employee benefits 741,421 322,419 2,843 1,066,683
Insurance - 11,742 - 11,742
Information technology 66,929 94,854 - 161,783
Medical supplies 661,141 - - 661,141
Occupancy 529,011 114,879 - 643,890
Office expenses 99,262 43,943 - 143,205
Other expenses 46,860 86,574 61,167 194,601
Payroll taxes 597,786 170,486 2,434 770,706
Professional fees 44,691 56,586 52,000 153,277
Retirement plan 160,916 53,040 1,069 215,025
Travel and training 23,021 20,535 - 43,556
Total $ 11,270,038 $ 3,693,230 $ 167,272 $ 15,130,540
The accompanying notes are an integral part of these financial statements.
Page 9
Community Health Partners, Inc.
STATEMENTS OF CASH FLOWS
Period Ended April 30 and Year Ended June 30 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets $ 403,661 $ 395,336
Adjustments to reconcile change in net assets to net cash
provided by (used in) operating activities:
Depreciation and amortization 485,771 508,105
Provision for bad debts 500,688 414,340
Loss on disposal of assets - 12,378
Interest income earned on certificates of deposit (108,745) (76,645)
Changes in:
Patient accounts receivable - net (778,449) (383,538)
Pharmacy accounts receivable (8,036) (35,047)
Grants receivable 15,780 (116,995)
Employee retention credit receivable (2,281,251) -
Interest and other receivables (82,926) (285,096)
Pledges receivable 33,185 60,313
Inventory 5,893 (174,558)
Prepaid expenses (33,819) 1,667
Deposits - 5,000
Accounts and interest payable 369,950 (20,964)
Payroll liabilities 342,481 (13,789)
Refundable grant advance (159,026) (24,068)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,294,843) 266,439
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of certificates of deposit 2,446,917 2,802,000
Purchases of certificates of deposit (500,010) (2,261,920)
Proceeds from the sale of property and equipment - 52,000
Purchases of property, equipment, and computer software (12,546) (2,369,382)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 1,934,361 (1,777,302)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of closing costs - (16,213)
Proceeds from note payable - 1,280,000
Payments on long-term debt (104,836) (32,087)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (104,836) 1,231,700
Net Change in Cash and Cash Equivalents 534,682 (279,163)
Cash and Cash Equivalents - Beginning of Year 1,120,027 1,399,190
Cash and Cash Equivalents - End of Year $ 1,654,709 $ 1,120,027
The accompanying notes are an integral part of these financial statements.
Page 10
Community Health Partners, Inc.
STATEMENTS OF CASH FLOWS
(Continued)
Period Ended April 30 and Year Ended June 30 2024 2023
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 71,711 $ 69,342
The accompanying notes are an integral part of these financial statements.
Page 11
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities Community Health Partners, Inc. (the Clinic) is a nonprofit federally qualified health
center under Section 330 of the Public Health Service (PHS) Act. The Clinic is governed by a Board of
Directors (the Board). The day-to-day operations of the Clinic are administered by the Chief Executive
Officer who serves at the pleasure of the Board. Revenues are received from Medicare, Medicaid,
private insurance carriers, individuals, private grants, and government grants. The Clinic provides initial
primary health services for all residents of Livingston, Bozeman, Belgrade, West Yellowstone, and the
surrounding areas. Primary services include:
Services of physicians, physician assistants, nurse clinicians, dentists, hygienists, mental
health therapists, and pharmacists
Diagnostic laboratory
Preventative and emergency dental services
Pharmaceutical services
Behavioral health services
The Clinic also has a program, Learning Partners, that integrates educational programs with medical,
dental, and behavioral health services; empowering individuals and families to become healthy, self-
reliant, life-long learners.
Basis of Accounting The accompanying financial statements have been prepared on the accrual basis
of accounting in accordance with accounting principles generally accepted in the United States of
America (GAAP), as codified by the Financial Accounting Standards Board (FASB).
In accordance with GAAP, the Clinic reports information regarding its financial position and activities
according to two classes of net assets:
Net Assets Without Donor Restrictions: Net assets available for use in general operations and
not subject to donor (or certain grantor) restrictions.
Net Assets With Donor Restrictions: Net assets that are subject to donor or certain grantor-
imposed stipulations. Some donor or grant restrictions are temporary in nature such as those
that will be met by the passage of time or other events specified by the donor or grantor. Other
donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources
be maintained in perpetuity. Donor-imposed restrictions are released when a restriction
expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which
the resource was restricted has been fulfilled or both.
Revenues are reported as increases in net assets without donor restrictions unless use of the related
assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets
without donor restrictions. Income on investments earned and other assets or liabilities are reported
as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit
donor stipulation.
Page 12
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
When a donor’s restriction is satisfied, either by using the resources in the manner specified by the
donor or by the passage of time, the expiration of the restriction is reported in the financial statements
by reclassifying the net assets from net assets with donor restrictions to net assets without donor
restrictions.
Support and revenue that are restricted by the donor are reported as net assets without donor
restrictions if the restrictions are met in the same year in which the support and revenue are received.
Implementation of New Accounting Standards On July 1, 2023, the Clinic adopted FASB Accounting
Standards Update 2016-13, Financial Instruments – Credit Losses, and all related subsequent
amendments. This guidance significantly changed how the Clinic will measure credit losses for most
financial assets and certain other instruments that are not measured at fair value through net income.
The most significant change in this standard is a shift from the incurred loss model to the expected loss
model. Under the standard, disclosures are required to provide users of the financial statements with
useful information in analyzing the Clinic’s exposure to credit risk and the measurement of credit losses.
Financial assets held by the Clinic that are subject to this guidance were trade accounts receivable.
The Clinic adopted the standard effective July 1, 2023. The impact of the adoption was not considered
material to the financial statements and primarily resulted in new or enhanced disclosures only.
The Clinic adopted the standard using a modified retrospective method for all financial assets measured
at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after
July 1, 2023, are presented under the standard while prior-period amounts continue to be reported in
accordance with previously applicable GAAP.
Use of Estimates The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and Cash Equivalents For purposes of the statement of cash flows, the Clinic considers all highly
liquid investments purchased with a maturity of three months or less to be cash and cash equivalents.
Concentration of Credit Risk The Clinic maintains its cash, cash equivalents, and certificates of deposit
at various financial institutions. The Clinic’s cash and cash equivalents and certificates of deposits are
insured, up to $250,000 at each institution by the Federal Deposit Insurance Corporation (FDIC). From
time to time, certain bank accounts that are subject to FDIC coverage may exceed their insured limits.
Pharmacy Receivables At April 30, 2024, and June 30, 2023, the Clinic had $203,265 and $195,229,
respectively, of pharmacy accounts receivable. This amount includes retail pharmacy receivables, as
well as receivables due from the Clinic’s contract pharmacies. These amounts are considered fully
collectible and no allowance for doubtful accounts has been recorded.
Page 13
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
Fair Value Investments GAAP includes standards addressing fair value measurements. Fair value is
defined as the exchange price that would be received for an asset, or paid to transfer a liability, in an
orderly transaction between market participants on the measurement date. Valuation techniques used
to measure fair value maximize the use of observable inputs and minimize the use of unobservable
inputs, using the market value approach.
GAAP established a fair value hierarchy, which prioritizes the valuation inputs into three broad levels:
Level 1: Quoted market prices available through public exchange venues for identical assets
or liabilities.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as
quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs for the asset or liability due to little or no market activity at the
measurement date.
Trade Accounts Receivable, Allowance for Credit Losses and Credit Policies Trade accounts receivable
are stated at face amount. The Clinic maintains allowances for credit losses for estimated losses
resulting from the inability of its patients to make required payments. Management considers the
following factors when determining the collectability of specific customer accounts: creditworthiness,
past transaction history, current economic industry trends, forecast of future events and the resident’s
ability to pay. Past due balances of 365 days and other higher risk amounts are reviewed individually
for collectability. If the financial condition of the Clinic's patients were to deteriorate, adversely affecting
their ability to make payments, additional allowances would be required. Based on management's
assessment, the Clinic provides for estimated uncollectible amounts through a credit to a valuation
allowance. Balances that remain outstanding after the Clinic has used reasonable collection efforts are
written off through a charge to the valuation allowance and a credit to accounts receivable.
Accounts receivable are uncollateralized patient obligations due under normal trade terms requiring
payment within 30 days from the invoice date. However, the Clinic has a variety of credit relationships
with its patients and different trade terms are not uncommon. Payments of accounts receivable are
allocated to the specific invoices identified on the patient’s remittance advice showing dates of service.
The Clinic does not charge interest on outstanding accounts receivable. The Clinic has tracked historical
loss information for its trade receivables and compiled historical credit loss percentages for different
aging categories (current, 1–30 days past due, 31–60 days past due, 61–90 days past due, and more
than 90 days past due).
Management believes that the historical loss information it has compiled is a reasonable base on which
to determine expected credit losses for trade receivables held at April 30, 2024, because the
composition of the trade receivables at that date is consistent with that used in developing the historical
credit-loss percentages (i.e., the similar risk characteristics of its customers and its lending practices
have not changed significantly over time). Management has determined that the current and
reasonable and supportable forecasted economic conditions are similar to the economic conditions
included in the historical information.
Page 14
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
Inventory Pharmacy inventory is stated at the higher of the last cost paid or current replacement cost,
which is a methodology other than GAAP. Management does not believe there is a material difference
in the methods used to value pharmaceuticals. Inventory is sold on the first-in first-out method.
Property, Equipment, and Intangible Assets Property, equipment and intangible assets are stated at
cost. All expenditures for equipment and intangible assets over $5,000 are capitalized. If actual cost
cannot be determined, estimated historical cost is used. Donated property is recorded at its estimated
fair value at the date of receipt. Depreciation and amortization are computed on the straight-line
method based on the following estimated useful lives:
Buildings 10–40 years
Office and medical equipment 3–10 years
Computer software 3–8 years
Pledges Receivable Unconditional promises to give (pledges receivable) are recognized as revenues or
gains in the period received and as assets, decreases of liabilities, or expenses depending on the form
of the benefits received. Conditional promises to give are recognized only when the conditions on which
they depend are substantially met and the promises become unconditional. Unconditional promises to
give that will be collected beyond one year are reported at the present value of the anticipated cash
flows using the discount rate established at the date of the pledge.
Performance Indicator The statement of activities includes change in net assets without donor
restrictions as a performance indicator. Changes in net assets without donor restrictions which are
excluded from operating income, consistent with industry practice, include interest expense, realized
and unrealized gains (losses) on investments, and investment income.
Contribution Revenue Contributions are recognized when cash, or other assets, an unconditional
promise to give, or notification of beneficial interest is received. A portion of the Clinic’s revenue is
derived from cost-reimbursable contracts and grants, which are conditioned upon certain performance
requirements and/or the incurrence of allowable qualifying expenses. Amounts are recognized as
revenue when the Clinic has incurred expenditures in compliance with specific contract or grant
provisions. Amounts received prior to incurring qualifying expenditures are reported as refundable
grant advances in the statement of financial position. As of April 30, 2024, and June 30, 2023, the Clinic
had $13,334 and $172,360 in refundable grant advances, respectively.
Charity Care The Clinic does not provide or recognize charity care. Reduction and fee write-offs are
included in the Sliding Fee Discount Program compliant with the 330 grant program. Write-offs for
patients who are unable to pay are charged to bad debt expense.
Net Fees and Contracts Net fee and contract revenue is reported at the estimated net realizable
amounts from patients, third-party payors, and others for services rendered. However, net fee and
contract revenue includes variable consideration for revenue adjustments due to settlement of audits,
reviews, and investigations. Generally, the Clinic bills patients and third-party payors within the month
the services are performed. Revenue is recognized as performance obligations are satisfied.
Page 15
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
Performance obligations are determined based on the nature of the services provided by the Clinic. All
fee and contract revenues relate to performance obligations satisfied at a point in time and are
recognized when services are provided, as the Clinic does not believe it is required to provide additional
goods or services to the patient.
Because all of its performance obligations relate to contracts with a duration of less than one year, the
Clinic has elected to apply the optional exemption provided in FASB Accounting Standards Codification
606-10-50-14(a) and, therefore, is not required to disclose the aggregate amount of the transaction
price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the
reporting period. The unsatisfied or partially unsatisfied performance obligations referred to above are
primarily related to patient care services at the end of the reporting period. The performance
obligations for these contracts are generally completed when the patients are discharged, which
generally occurs the same day the service is provided.
The Clinic determines the transaction price based on standard charges for goods and services provided,
reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured
patients in accordance with the Clinic’s policy and/or implicit price concessions provided to uninsured
patients. The Clinic determines its estimates of contractual adjustments and discounts based on
contractual agreements, its discount policy(ies), and historical experience. The Clinic determines its
estimate of implicit price concessions based on its historical collection experience with this class of
patients.
Agreements with third-party payors provide for payments at amounts less than established charges. A
summary of the payment arrangements with major third-party payors follows:
Medicare and Medicaid: Reimbursements for Medicare services are paid based on costs for
services . These rates vary according to a patient classification system that is based on clinical,
diagnostic, and other factors. Other services rendered to Medicare/Medicaid program
beneficiaries are reimbursed under a cost reimbursement methodology.
Other: Payment agreements with certain commercial insurance carriers, health maintenance
organizations, and preferred provider organizations are paid on a fee-for-service basis based on
payment agreements.
Laws and regulations concerning government programs, including Medicare and Medicaid, are complex
and subject to varying interpretation. As a result of investigations by governmental agencies, various
healthcare organizations have received requests for information and notices regarding alleged
noncompliance with those laws and regulations, which, in some instances, have resulted in
organizations entering into significant settlement agreements. Compliance with such laws and
regulations may also be subject to future government review and interpretation, as well as significant
regulatory action, including fines, penalties, and potential exclusion from the related programs. There
can be no assurance that regulatory authorities will not challenge the Clinic’s compliance with these
laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties
would have upon the Clinic. In addition, the contracts the Clinic has with commercial payors also provide
for retroactive audit and review of claims.
Page 16
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
Settlements with third-party payors for retroactive revenue adjustments due to audits, reviews, or
investigations are considered variable consideration and are included in the determination of the
estimated transaction price for providing patient care.
These settlements are estimated based on the terms of the payment agreement with the payor,
correspondence from the payor and the Clinic’s historical settlement activity, including an assessment
to ensure that it is probable that a significant reversal in the amount of cumulative revenue recognized
will not occur when the uncertainty associated with the retroactive adjustment is subsequently
resolved.
Estimated settlements are adjusted in future periods as adjustments become known (that is, new
information becomes available), or as years are settled or are no longer subject to such audits, reviews,
and investigations. Adjustments arising from a change in the transaction price, were not significant in
2024 or 2023.
The nature, amount, timing and uncertainty of revenue and cash flows are affected by several factors
that the Clinic considers in its recognition of revenue. Following are some of the factors considered:
Payors (for example, Medicare, Medicaid, managed care or other insurance,
resident/patient) have different reimbursement/payment methodologies
Length of the patient’s service/episode of care
Geography of the service location
Organization’s line of business that provided the service (medical, dental, behavioral health,
pharmacy)
For the period ended April 30, 2024, and year ended June 30, 2023, the Clinic recognized net revenue
of $6,531,143 and $8,428,361, respectively, at the time the services were provided.
The mix of accounts receivable and revenue from patients and third-party payors follows:
April 30 and June 30 2024 2023
Accounts Receivable
Medicaid 12% 25%
Medicare 21% 13%
Private and other 67% 62%
Revenue
Medicaid 51% 59%
Medicare 10% 10%
Private and other 38% 31%
Functional Allocation of Expenses The financial statements report certain categories of expenses that
are attributable to more than one program or supporting function. Therefore, these expenses require
allocation on a reasonable basis that is consistently applied. All expenses are allocated on a percentage
basis as determined by management.
Page 17
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
Advertising Expense Advertising costs are expensed as incurred. Total advertising cost expensed for
the period ended April 30, 2024, and year ended June 30, 2023, was $13,030 and $17,635, respectively.
Income Taxes The Clinic is exempt from federal income taxes under Section 501(c)(3) of the Internal
Revenue Code (IRC).
Loan Closing Costs Closing costs are amortized over the life of the loan using the straight-line method
and presented as a reduction of the carrying amount of the debt rather than an asset. Amortization of
closing costs are classified as a component of interest expense.
Reclassifications Certain amounts in the prior-year financial statements have been reclassified for
comparative purposes to conform with the presentation in the current-year financial statements. These
reclassifications do not affect prior-year changes in net assets and net assets as reported in the prior-
year financial statements.
Evaluation of Subsequent Events The Clinic has evaluated subsequent events through December 4,
2024, the date the financial statements were available to be issued.
2. LIQUIDITY AND AVAILABILITY
The Clinic’s financial assets available within one year of the statement of financial position for general
expenditures are as follows:
April 30 and June 30 2024 2023
Financial assets at year-end:
Cash and cash equivalents $ 1,654,709 $ 1,120,027
Receivables - net of allowance 1,215,532 983,390
Certificates of deposit 1,248,861 3,066,610
Total Financial Assets 4,119,102 5,170,027
Less amounts not available to be used within one year:
Certificates of deposit with loan restrictions 51,700 51,700
Net assets with donor restrictions 27,798 50,693
Board-designated net assets 1,492,320 1,543,012
Subtotals 1,571,818 1,645,405
Financial Assets Available to Meet General
Expenditures Over the Next 12 Months $ 2,547,284 $ 3,524,622
Receivables, net of allowance, do not include the Employee Retention Credit (ERC) receivable (see
note 12).
As of April 30, 2024, and June 30, 2023, the Clinic had working capital of $5,477,532 and $4,749,808,
respectively, and 48 and 27 days cash on hand, respectively.
Page 18
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
The Clinic’s annual operating budget anticipates receiving funds throughout the year from the following
sources, typically allowing them to operate with a positive cash flow position:
Net service revenues supported 39% and 45% of costs for routine operations for the period
ended April 30, 2024, and year ended June 30, 2023, respectively.
Grants from federal, state, and other sources contributed 40% and 55% of total expense
directly related to program expenses for the period ended April 30, 2024, and year ended
June 30, 2023, respectively.
The Clinic has been successful in receiving additional grant awards as opportunities arise and will
continue to apply for appropriate funding. Additionally, the Clinic had $1,492,320 and $1,543,012 in a
board-designated operating reserve as of April 30, 2024, and June 30, 2023, respectively. Although the
Clinic doesn’t intend to spend from its board designated operating reserve, amounts could be made
available, if necessary.
3. CERTIFICATES OF DEPOSIT
Certificates of deposit are valued at fair market value as discussed in note 1. Fair market value as of
April 30, 2024, was $1,248,861–consisting of $1,197,161 current certificates of deposit and $51,700
noncurrent certificates of deposit. Fair market value as of June 30, 2023, was $3,066,610–consisting of
$3,014,910 current certificates of deposit and $51,700 noncurrent certificates of deposit. Certificates
of deposit are a level 2 investment.
4. LONG-TERM NOTE RECEIVABLE
During 2021, the Clinic entered into an agreement with a developer for the purchase and construction
of the Bozeman facility. The terms of this agreement state that the Clinic will lend the borrower
$673,950 for the initial purchase of land for this development project and will continue to advance funds
to the borrower for the remainder of the development of this facility project at an annual interest rate
of 3%. Beginning in 2022, the Clinic began leasing the new building for $1 per year during the Low-
Income Housing Tax Credit compliance period of 15 years under Section 42 of the IRC. This note
receivable will mature 2 years after the completion of the 15-year tax credit compliance period, at which
time, the Clinic will purchase the building for $1 plus the release of the note receivable and the accrued
interest. The maturity of this note receivable is December 31, 2038. The outstanding balance on this
note receivable at April 30, 2024, is $4,409,163, including principal of $4,071,307 and accrued interest
of $337,856. The outstanding balance on this note receivable at June 30, 2023, is $4,308,775, including
principal of $4,071,307 and accrued interest of $237,468.
Page 19
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
5. PATIENT ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
June 30
April 30, 2024 2024 2023
Gross patient accounts receivable $ 978,318 $ 765,928 $ 825,738
Less: Allowance for credit losses (226,984) (292,355) (321,363)
Patient Accounts Receivable - Net $ 751,334 $ 473,573 $ 504,375
Changes in the allowance for credit losses were as follows:
June 30
April 30, 2024 2024 2023
Beginning Balance $ 292,355 $ 321,363 $ 304,682
Provision for credit losses 435,317 385,332 424,754
Write-offs (500,688) (414,340) (408,073)
Ending Balance $ 226,984 $ 292,355 $ 321,363
6. PLEDGES RECEIVABLE
Pledges receivable consisted of the following:
April 30 and June 30 2024 2023
Receivable in one year or less $ 26,000 $ 22,333
Receivable in one year to five years 39,000 74,500
Subtotals 65,000 96,833
Discount at 4.65% and 4.13%, respectively (2,911) (1,559)
Subtotals 62,089 95,274
Less: Current portion 26,000 22,333
Pledges Receivable - Net of Current Portion $ 36,089 $ 72,941
Page 20
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
7. LONG-TERM DEBT
Notes payable consisted of the following:
April 30 and June 30 2024 2023
Note payable to First Interstate Bank, secured by building,
payable in monthly principal installments of $8,421, interest
accrues at 6.220%, and matures December 25, 2032. $ 1,227,140 $ 1,268,587
Note payable to the U.S. Department of Agriculture in monthly
installments of $4,327, including interest at 4.625%; due on
June 25, 2042. Secured by the Livingston clinic building and the
revenues, rents, profits, income, payments, contracts, accounts
receivable, general intangibles, grant proceeds, and other
revenue derived from the Livingston clinic building operations. 573,999 637,388
Total Notes Payable 1,801,139 1,905,975
Current portion (25,195) (44,571)
Total Long-Term Debt - Net of Current Portion $ 1,775,944 $ 1,861,404
Aggregate maturities for the next five years and thereafter to be paid by One Health subsequent to the
merger effective May 1, 2024 (see note 12). Maturities are as follows:
April 30
2025 $ 25,195
2026 51,072
2027 53,743
2028 56,960
2029 60,166
Thereafter 1,554,003
Total $ 1,801,139
Amortization of closing costs amounted to $1,351 and $946 for the period ended April 30, 2024, and
year ended June 30, 2023, respectively.
8. BOARD-DESIGNATED OPERATING RESERVE
The Clinic has established a board-designated operating reserve for unanticipated expenses and other
projects. The board-designated operating reserve was $1,492,320 and $1,543,012 for the period year
ended April 30, 2024, and year ended June 30, 2023, respectively.
Page 21
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
9. NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions are as follows:
April 30 and June 30 2024 2023
Restricted for Specific Purposes
Interdisciplinary Research Leaders program $ 14,856 $ 25,693
Enabling services 12,942 25,000
Total Restricted for Specific Purposes $ 27,798 $ 50,693
There were $22,895 net assets released from restrictions during the period ended April 30, 2024, and
$-0- net assets released from restrictions during the year ended June 30, 2023.
10. CONTRIBUTED NONFINANCIAL ASSETS
In-kind contributions included in the statements of activities include donations of vaccines from the
State of Montana Department of Health and Human Services Immunization Program in the amount of
$48,130 and $293,127 for the period ended April 30, 2024, and year ended June 30, 2023, respectively.
Vaccines are valued using Centers for Disease Control vaccine values of identical products. The Clinic
does not sell in-kind contributions and uses the vaccines in program activities.
11. RELATED-PARTY TRANSACTIONS
The Clinic had the following related-party transactions that have been approved by the Board:
The Chief Medical Informatics Officer of Bozeman Deaconess Hospital (BH) is a member of the Clinic’s
Board.
The Clinic had a services agreement with Sanford Health Network and Sanford Medical Center
(collectively, Stanford), and BH, which is in effect from September 30, 2015, until BH’s affiliation with
Sanford is terminated where Sanford and BH implement, host, support, and maintain the Clinic’s
electronic medical record platform. BH provides electronic storage and retrieval of radiology images
and data, and performs other ancillary services for the Clinic.
In November 2022, the Clinic entered into an electronic medical record access agreement with BH. This
agreement terminated the previous services agreement.
A total of $208,455 and $250,941 was billed to the Clinic during the period ended April 30, 2024, and
year ended June 30, 2023, respectively, by BH. As of April 30, 2024, and June 30, 2023, $21,189 and
$20,619 was owed to BH, respectively.
Page 22
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
12. RISKS AND UNCERTAINTIES
The Clinic is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; and natural disasters in the ordinary course of business. These risks are
covered by commercial insurance purchased from independent third parties. The Clinic is covered under
the PHS Act, which provides medical liability coverage under the Federal Tort Claims Act (FTCA) as part
of the Health Resources and Services Administration grant.
The Clinic purchases additional gap insurance to insure against claims not covered under the FTCA
insurance. Settled claims from these risks have not exceeded commercial coverage.
Management believes that none of the claims currently pending or threatened would have a significant
impact on the financial condition of the Clinic and that insurance is sufficient to mitigate the risk to the
Clinic; however, circumstances may change and management may change its position in the future.
During the period ended April 30, 2024, the Clinic retained the services of Stenson Tamaddon, LLC to
assist in the application of an ERC claim for quarters ending March 31, June 30, and September 30, 2021,
and filed amended Form 941-X for each applicable quarter. The Clinic paid a $3,000 retainer in October
2023. Additionally, the agreement with Stenson Tamaddon, LLC includes a fee of 12.5% of the credit
received. In September 2023, the Internal Revenue Services (IRS) began a moratorium of the ERC claims
and did not begin processing claims again until August 2024. The ERC receivable of $2,281,251 and
amount payable to Stenson Tamaddon, LLC of $315,261 is included in the statement of financial position
as of April 30, 2024. The IRS has not yet approved the Clinic's ERC claim as of the date of this report.
13. RETIREMENT PLAN
The Clinic sponsors a 403(b) retirement plan for its employees. Employees are eligible to participate in
the Plan on the first day of employment provided they work 10 hours or more per week. Employees are
eligible to receive employer contributions after the employee has completed one year of service with
the Clinic. A year of service is defined as the earlier of six months of continuous service or 1,000 hours
of service during the relevant eligibility computation period. Eligible employees can defer up to 100%
of their eligible compensation into the Plan, up to the maximum allowed by the IRC. The Clinic matches
the employee’s contribution dollar for dollar up to 3% of their gross wage, and the Clinic matches 50%
of the employee’s contribution above 3% up to a maximum of a 4% match.
The contribution charged to expense for the period ended April 30, 2024, and year ended June 30, 2023,
was $186,930 and $215,025, respectively.
Page 23
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
14. LEASES
The Clinic accounts for all operating leases with a lease term greater than one year and/or a fair value
greater than $5,000 at lease commencement as a liability with a corresponding right-of-use asset. As a
result, the following lease is recognized as such:
Belgrade, Montana Lease: The Clinic entered into a six-year operating lease for an office in
Belgrade, Montana, effective December 1, 2018. The lease required monthly payments of
$4,220 through August 31, 2019. The monthly payments increased to $5,097 beginning
September 1, 2019, through December 31, 2024. Rent expense under this lease agreement for
the building for the fiscal year ended June 30, 2023, was $43,691. This lease was terminated on
December 27, 2022, when the Clinic purchased the building.
The components of lease expense were as follows:
April 30 and June 30 2024 2023
Operating lease cost $ - $ 43,691
Short-term lease cost $ 740 $ 1,331
The weighted-average remaining lease term and weighted-average discount rates for operating leases
are as follows:
April 30 and June 30 2024 2023
Weighted-average remaining lease terms
in years for operating leases - -
Weighted-average discount rate for operating leases 0.00% 3.99%
The Clinic also rents office space under short-term leases with durations less than 12 months, and has
elected to use the short-term lease exemption, which allows for the expense to be recognized on a
straight-line basis over the lease terms.
West Yellowstone, Montana Lease: The Clinic entered into a one-year operating lease for an
office in West Yellowstone, Montana, effective January 1, 2017. The agreement was renewed
automatically for consecutive one-year terms ending December 31, 2021. The lease required
annual payments of $1,200. A new one-year lease was executed through December 31, 2023,
with one-year extensions for up to five years and requires annual payments of $1. Total rental
expense under this agreement for this building for each of the period ended April 30, 2024, and
year ended June 30, 2023, was $1 and $601, respectively.
Page 24
Community Health Partners, Inc.
NOTES TO THE FINANCIAL STATEMENTS
(Continued)
15. COMMITMENTS AND CONTINGENCIES
The healthcare industry is subject to numerous laws and regulations of federal, state, and local
governments. These laws and regulations include, but are not limited to matters such as licensure,
accreditation, government health care program participation requirements, reimbursement for patient
services, and Medicaid fraud and abuse.
Recently, government activity has increased with regard to investigations and allegations concerning
possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of
these laws and regulations could result in expulsion from government health care programs, as well as
the imposition of significant fines and penalties and repayments for patient services previously billed.
16. SUBSEQUENT EVENTS
On May 1, 2024, the Clinic successfully completed its merger with Bighorn Valley Health Center, Inc.,
doing business as One Health, a nonprofit community health center. The merger was executed as
planned and previously disclosed in the letter of intent dated November 2023. The combined entity has
begun operating under the name One Health.
Page 25
OTHER SUPPLEMENTARY INFORMATION
Community Health Partners, Inc.
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Period Ended April 30, 2024
Federal Passed Loan Balance
Assistance Amount Federal Through to at Beginning
Federal Grantor/Pass-Through Grantor/Program Title Listing Awarded Expenditures Subrecipients of Period
Grants
U.S. Department of Health and Human Services
Health Center Program:
H80 CS 00736-23 93.224 $ 3,660,162 $ 91,067 $ - $ -
H80 CS 00736-22 93.224 $ 3,660,162 2,959,068 - -
Total AL #93.224 - U.S. Department of Health and Human Services 3,050,135 - -
COVID-19 - Expanding COVID-19 Vaccination 93.527 $ 164,835 8,936 - -
Total AL #93.527 - U.S. Department of Health and Human Services 8,936 - -
Total Health Center Program Cluster 3,059,071 - -
COVID-19 - Health Center Infrastructure Support 93.526 $ 629,162 12,219 - -
Total AL #93.526 - U.S. Department of Health and Human Services 12,219 - -
U.S. Department of Health and Human Services
Passed Through State of Montana Department of
Health and Human Services:
PATHWAYS Grant 93.558 $ 104,122 54,442 - -
Total AL #93.558 - Passed Through State of Montana
Department of Health and Human Services 54,442 - -
MIECHV Grant 93.870 $ 184,859 110,678 - -
Total AL #93.870 - Passed Through State of Montana
Department of Health and Human Services 110,678 - -
Total U.S. Department of Health and Human Services 3,236,410 - -
U.S. Department of Education
Passed Through State of Montana Office of Public Instruction:
ABLE Grant 84.002 $ 43,077 35,802 - -
Total AL #84.002 - Passed Through State of Montana
Office of Public Instruction 35,802 - -
Total U.S. Department of Education 35,802 - -
Loans and Loan Guarantees
U.S. Department of Agriculture
Community Facilities Loans and Grants 10.766 $ - - - 637,388
Total AL #10.766 - U.S. Department of Agriculture - - 637,388
Total U.S. Department of Education - - 637,388
TOTAL FEDERAL EXPENDITURES OF FEDERAL AWARDS $ 3,272,212 $ - $ 637,388
See the accompanying notes to theother supplementary information.
Page 27
Community Health Partners, Inc.
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
1. BASIS OF ACCOUNTING
The accompanying schedule of expenditures of federal awards includes the federal grant activity of the
Community Health Partners, Inc. (the Clinic) and is presented on the accrual basis of accounting for the
period July 1, 2023, through April 30, 2024. The information in this schedule is presented in accordance
with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts
presented in this schedule may differ from amounts presented in or used in the preparation of the
general purpose financial statements.
2. COST PRINCIPLES
The accompanying schedule of expenditures of federal awards is presented using the cost principles
from Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Subpart E
Cost Principles.
3. INDIRECT COST RATE
For the U.S. Department of Health and Human Services grants passed through the state of Montana,
the Clinic has elected to use the 10% de minimus indirect cost rate from Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Subpart E Cost Principles.
4. LOANS OUTSTANDING
The Clinic received a direct loan from the United States Department of Agriculture under Assistance
Listing Number 10.766, Community Facilities Loans and Grants. The ending balance of the loan
outstanding at April 30, 2024, with continuing compliance requirements was $573,999.
5. SUBSEQUENT EVENTS
On May 1, 2024, the Clinic successfully completed its merger with Bighorn Valley Health Center, Inc.,
doing business as One Health, a nonprofit community health center. The merger was executed as
planned and previously disclosed in the letter of intent dated November 2023. The combined entity has
begun operating under the name, One Health.
Page 28
OTHER REPORTS SECTION
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Community Health Partners, Inc.
Livingston, Montana
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of Community Health Partners, Inc., a nonprofit health care entity (the Clinic), which
comprise the statement of financial position as of April 30, 2024; the related statements of
activities, functional expenses, and cash flows for the period then ended; and the related notes
to the financial statements, and have issued our report thereon dated December 4, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Clinic’s
internal control over financial reporting (internal control) as a basis for designing audit procedures
that are appropriate in the circumstances for the purpose of expressing our opinion on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
Clinic’s internal control. Accordingly, we do not express an opinion on the effectiveness of the
Clinic’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the Clinic’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit, we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses or significant deficiencies may exist that were not identified.
Page 30
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
(Continued)
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Clinic’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity’s internal control or on compliance. This report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the Clinic’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
December 4, 2024
Great Falls, Montana
Page 31
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE
UNIFORM GUIDANCE
To the Board of Directors
Community Health Partners, Inc.
Livingston, Montana
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Community Health Partner, Inc.’s, a nonprofit health care entity (the Clinic)
compliance with the types of compliance requirements identified as subject to audit in the OMB
Compliance Supplement that could have a direct and material effect on the Clinic’s major federal
program for the period ended April 30, 2024. The Clinic’s major federal program is identified in
the summary of auditors’ results section of the accompanying schedule of findings and questioned
costs.
In our opinion, the Clinic complied, in all material respects, with the compliance requirements
referred to above that could have a direct and material effect on its major federal program for
the period ended April 30, 2024.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America (GAAS); the standards applicable to financial audits contained in
Government Auditing Standards issued by the Comptroller General of the United States
(Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal
Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards
and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of
Compliance section of our report.
We are required to be independent of the Clinic and to meet our other ethical responsibilities, in
accordance with relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on
compliance for each major federal program. Our audit does not provide a legal determination of
the Clinic’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the
design, implementation, and maintenance of effective internal control over compliance with the
requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements
applicable to the Clinic’s federal programs.
Page 32
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE
UNIFORM GUIDANCE
(Continued)
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with
the compliance requirements referred to above occurred, whether due to fraud or error, and
express an opinion on the Clinic’s compliance based on our audit. Reasonable assurance is a high
level of assurance, but is not absolute assurance, and therefore is not a guarantee that an audit
conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance
will always detect material noncompliance when it exists. The risk of not detecting material
noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Noncompliance with the compliance requirements referred to above is considered
material if there is a substantial likelihood that, individually or in the aggregate, it would influence
the judgment made by a reasonable user of the report on compliance about the Clinic’s
compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the
Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material noncompliance, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the Clinic’s
compliance with the compliance requirements referred to above and performing
such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the Clinic’s internal control over compliance relevant to
the audit in order to design audit procedures that are appropriate in the
circumstances and to test and report on internal control over compliance in
accordance with the Uniform Guidance, but not for the purpose of expressing an
opinion on the effectiveness of the Clinic’s internal control over compliance.
Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and any significant deficiencies and material
weaknesses in internal control over compliance that we identified during the audit.
Page 33
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH THE
UNIFORM GUIDANCE
(Continued)
Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose described in
the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to
identify all deficiencies in internal control over compliance that might be material weaknesses or
significant deficiencies in internal control over compliance and therefore, material weaknesses or
significant deficiencies may exist that were not identified. We did not identify any deficiencies in
internal control over compliance that we consider to be material weaknesses. However, as
discussed below, we did identify certain deficiencies in internal control over compliance that we
consider to be significant deficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type
of compliance requirement of a federal program will not be prevented, or detected and corrected,
on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance. We
consider the deficiencies in internal control over compliance described in the accompanying
schedule of findings and questioned costs as items #2024-001, #2024-002, and #2024-003, to be
significant deficiencies.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, no such opinion is expressed. Government Auditing
Standards requires the auditor to perform limited procedures on the Clinic’s response to the
internal control over compliance findings identified in our audit described in the accompanying
schedule of findings and questioned costs. The Clinic’s response was not subjected to the other
auditing procedures applied in the audit of compliance and, accordingly, we express no opinion
on the response.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose.
December 4, 2024
Great Falls, Montana
Page 34
FINDINGS AND QUESTIONED COSTS SECTION
Community Health Partners, Inc.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
April 30, 2024
SECTION I
SUMMARY OF AUDITORS’ RESULTS
FINANCIAL STATEMENTS
Type of auditors’ report issued: Unmodified
Internal control over financial reporting:
Material weaknesses identified? No
Significant deficiencies identified
not considered to be material weaknesses? None reported
Noncompliance material to financial statements? None
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified? No
Significant deficiencies identified
not considered to be material weaknesses? Yes
Type of auditors’ report issued on compliance for major programs: Unmodified
Any audit findings disclosed that are required to be reported in
accordance with 2 CFR 200.516(a)? No
Identification of major programs:
AL No. 93.224 & 93.527 US Department of Health and Human Services
Health Center Program Cluster
Dollar threshold used to distinguish between Type A and Type B programs: $ 750,000
Auditee qualified as low-risk auditee? No
Page 36
Community Health Partners, Inc.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
April 30, 2024
(Continued)
SECTION II
FINANCIAL STATEMENTS FINDINGS
None.
Page 37
Community Health Partners, Inc.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
April 30, 2024
(Continued)
SECTION III
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
#2024-001 – Grant Program: Department of Health and Human Services Health Centers Cluster – Assistance
Listing # 93.224/93.527
Condition: As a result of our audit procedures, we noted instances where no supporting eligibility
application and income verification were maintained by Community Health Partners,
Inc. (the Clinic) to support the sliding fee scale discount adjustment that the patient
received.
Criteria: The sliding fee scale discount is based on patient income and demographic
information.
Effect: Continued non-compliance could result in a loss of funding. Additionally, it could
result in improper client billing and loss of revenue.
Context: The Clinic did not maintain an eligibility application and income verification for 3 out
of 40 patients tested.
Cause: The Clinic had no form of secondary review in place, resulting in the errors in
improper documentation not being detected and corrected in a timely manner.
Recommendation: We recommend a secondary review of the applications and system input to ensure
the proper documentation is verified in the electronic health records to support the
slide eligibility.
Management
Response: See Corrective Action Plan.
Page 38
Community Health Partners, Inc.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
April 30, 2024
(Continued)
SECTION III
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
#2024-002 – Grant Program: Department of Health and Human Services Health Centers Cluster – Assistance
Listing # 93.224/93.527
Condition: As a result of our audit procedures over the UDS report, it was identified that the
number of visits reported for physicians was overstated, while those for Nurse
Practitioners (NPs) were understated. This discrepancy was due to a system error that
incorrectly classified NPs as physicians.
Criteria: Accurate reporting of service utilization by specific provider types is crucial for
compliance with Department of Health and Human Services guidelines.
Effect: Misclassification could lead to non-compliance with grant reporting requirements,
potentially affecting the Clinic’s funding and accuracy of statistical data used for
healthcare planning and resource allocation.
Context: An analysis of visit data revealed that a system coding error led to incorrect provider
type attribution where several NPs were recorded as physicians.
Cause: Review of the report detected the error but it was not corrected in the final
submission.
Recommendation: We recommend an immediate review and correction of the errors noted in the
accuracy report be completed prior to submission.
Management
Response: See Corrective Action Plan.
Page 39
Community Health Partners, Inc.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
April 30, 2024
(Continued)
SECTION III
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
#2024-003 – Grant Program: Department of Health and Human Services Health Centers Cluster – Assistance
Listing # 93.224/93.527
Condition: As a result of our audit procedures, we noted an instance that payroll was processed
without prior approval from the Chief Executive Officer (CEO) or Chief financial Officer
(CFO), which is a violation of the Clinic's internal control policies.
Criteria: The Clinic's internal control policies require that all payroll transactions be approved
by either the CEO or the CFO before processing to ensure accuracy and compliance
with budgetary allocations.
Effect: The absence of proper approval could lead to unauthorized or erroneous payroll
transactions, potentially resulting in financial misstatements and non-compliance
with internal control requirements. This could also affect the Clinic’s financial
integrity and accountability.
Context: The approval for payroll processing was missing for one out of five payroll periods
tested.
Cause: The established pre-approval process was inadvertently bypassed by the payroll
department staff.
Recommendation: We recommend the implementation of a mandatory approval feature within the
payroll system that requires sign-off by the CEO or CFO before payroll can be
processed. Additionally, training should be provided to all payroll staff on the
importance of adhering to internal control policies. Regular audits of payroll
approvals should also be instituted to ensure compliance with the policy.
Management
Response: See Corrective Action Plan.
Page 40
Community Health Partners, Inc.
CORRECTIVE AUDIT PLAN
April 30, 2024
#2023-001 – Account Reconciliation and Financial Statement Closing Process
Current Status: No exceptions noted during the current-period audit.
Page 41
COMMUNITY HEALTH PARTNERS, INC
CORRECTIVE ACTION PLAN
PERIOD ENDING 4/30/2024
#2024-001 – Grant Program: Department of Health and Human Services Health Centers Cluster – Assistance
Listing # 93.224/93.527
Corrective Action Plan: As of 5/1/2024, Community Health Partners merged with One Health, thus adopting the sliding
fee scale policies and procedures. One Health employs Patient Financial Services Staff that
support and review the sliding scale application process, in addition to front desk staff assisting
with the initial application.
Anticipated
Completion Date: 12/31/2024
Contact Person
Responsible for
Corrective Action: Emily Faricy – Associate Vice President Finance
#2024-002 – Grant Program: Department of Health and Human Services Health Centers Cluster – Assistance
Listing # 93.224/93.527
Corrective Action Plan: As of 5/1/2024, Community Health Partners merged with One Health, which utilizes a data
analytics team along with the finance team to compile and review UDS data. UDS data
validation, including classification of provider visits, begins early in the UDS preparation process
and is verified by multiple sources. Classification of providers is verified by human resources,
finance and the data/informatics team. Preparation of the UDS submission includes cross-
referencing multiple data sets to ensure accuracy in classification of providers.
Anticipated
Completion Date: 2/15/2025
Contact Person
Responsible for
Corrective Action: Emily Faricy – Associate Vice President Finance
#2024-003 – Grant Program: Department of Health and Human Services Health Centers Cluster –
Assistance Listing # 93.224/93.527
Corrective Action Plan: As of 5/1/2024, Community Health Partners merged with One Health, which utilizes ADP as the
electronic payroll service provider. The payroll process within One Health requires review and
approval of timecards by supervisors and payroll administrators. One Health will ensure that
payroll is processed and reviewed according to approved policies.
Anticipated
Completion Date: 12/31/2024
Contact Person
Responsible for
Corrective Action: Emily Faricy – Associate Vice President Finance
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