Audit 13674

Title: 1. Basis of Presentation Accounting Policies: Expenditures and lost revenues reported in the SEFA are reported on the accrual basis of accounting in accordance with the HRSA terms and conditions for PRF funding. De Minimis Rate Used: N Rate Explanation: The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of CarolinaEast Health System (Hospital) under the programs of the federal government for the fiscal year ended June 30, 2023. The information in this SEFA is presented in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly and indirectly from federal agencies are included in this Schedule. Because the Schedule presents only a selected portion of the operations of the Hospital, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Hospital. As outlined in the May 2023 OMB Compliance Supplement, the amounts reported in the accompanying SEFA related to the Provider Relief Fund (PRF), Assistance Listing No. 93.498, are reported based upon the PRF reporting portal submission guidelines established by the Health Resource and Service Administration (HRSA). Seven separate reporting periods were established by HRSA based on the dates of receipt of PRF payments. Each reporting period has a specific period of availability which begins on January 1, 2020 and extends through specified deadlines, as indicated below: Payment Received Reporting Period (Payments Deadline PRF Portal Portal Exceeding $10,000 in Period of to Use Reporting Time Period Aggregate Received) Availability Funds Period April 10, 2020 to January 1, 2020 July 1, 2021 to Period 1 June 30, 2020 to June 30, 2021 June 30, 2021 September 30, 2021 July 1, 2020 to January 1, 2020 to January 1, 2022 Period 2 December 31, 2020 to December 31, 2021 December 31, 2021 to March 31, 2022 January 1, 2021 to January 1, 2020 July 1, 2022 to Period 3 June 30, 2021 to June 30, 2022 June 30, 2022 September 30, 2022 July 1, 2021 to January 1, 2020 January 1, 2023 Period 4 December 31, 2021 to December 31, 2022 December 31, 2022 to March 31, 2023 January 1, 2022 to January 1, 2020 July 1, 2023 to Period 5 June 30, 2022 to June 30, 2023 June 30, 2023 September 30, 2023 July 1, 2022 to January 1, 2020 January 1, 2024 Period 6 December 31, 2022 to December 31, 2023 December 31, 2023 to March 31, 2024 January 1, 2023 to January 1, 2020 July 1, 2024 to Period 7 June 30, 2023 to June 30, 2024 June 30, 2024 September 30, 2024 The accompanying SEFA includes those qualifying expenditures and lost revenues that were reported in the HRSA PRF portal for Period 4 and Period 5. Of that amount, $7,116,262 in PRF payments was recognized by the Hospital in their statement of revenues, expenses and changes in net position as Cares Act provider relief funding in other non-operating revenue during the nine month period ended June 30, 2022 and fiscal year ended September 30, 2021.

Title: 2. Basis of Accounting Accounting Policies: Expenditures and lost revenues reported in the SEFA are reported on the accrual basis of accounting in accordance with the HRSA terms and conditions for PRF funding. De Minimis Rate Used: N Rate Explanation: The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures and lost revenues reported in the SEFA are reported on the accrual basis of accounting in accordance with the HRSA terms and conditions for PRF funding. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Lost revenues are reported based on the HRSA Option 1, reporting of lost revenues by comparing actual revenues by quarter during the period of availability to actual revenues for similar quarters during 2019 prior to the COVID-19 Pandemic. Expenditures and lost revenues for Provider Relief Fund (PRF) are based upon the PRF report for the fiscal year ended June 30, 2023. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.