Audit 28447

FY End

2022-09-30

Total Expended

$14.48M

Findings

2

Programs

3

Organization: Thomas Health System, Inc. (WV)

Year: 2022 Accepted: 2023-07-01

Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
32355	2022-001	Significant Deficiency	Yes	L
608797	2022-001	Significant Deficiency	Yes	L

ALN	Program	Spent	Major	Findings
97.036	Disaster Grants - Public Assistance (presidentially Declared Disasters)	$6.34M	Yes	0
93.498	Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution - Period 3	$5.73M	Yes	0
93.498	Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution - Period 2	$2.40M	Yes	1

Contacts

Name	Title	Type
JQ95HKRKTFJ8	Timothy Skeldon	Auditee
3047663428	Justin Schumaker	Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, with theexception of expenditures associated with the Provider Relief Fund and American Rescue Plan (ARP)Rural Distribution (PRF) and the expenditures associated with Disaster Grants - Public Assistance(Presidentially Declared Disasters). Such expenditures are recognized following the cost principlescontained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limitedas to reimbursement. PRF expenditures are reported based upon the timing of reporting periods inaccordance with guidance provided by the Health Resources and Services Administration. Expendituresrelated to disaster grants are reported when the System has expended the necessary funds and theFederal Emergency Management Agency (FEMA) has approved the expenditures for reimbursement.Expenditures on the Schedule that occurred prior to the reporting period and approved by FEMA duringthe reporting period were $3,740,513. De Minimis Rate Used: N Rate Explanation: The System has not elected to use the 10% de minimis indirect cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awardactivity of the Thomas Health System, Inc. and Subsidiaries' (the System) under programs of the federalgovernment for the year ended September 30, 2022. The information in this schedule is presented inaccordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UniformGuidance). Because the Schedule presents only a selected portion of the operations of the System, it isnot intended to and does not present the financial position, changes in net position or cash flows of theSystem.

Title: Provider Relief Funds and American Rescue Plan (ARP) Rural Distribution Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, with theexception of expenditures associated with the Provider Relief Fund and American Rescue Plan (ARP)Rural Distribution (PRF) and the expenditures associated with Disaster Grants - Public Assistance(Presidentially Declared Disasters). Such expenditures are recognized following the cost principlescontained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limitedas to reimbursement. PRF expenditures are reported based upon the timing of reporting periods inaccordance with guidance provided by the Health Resources and Services Administration. Expendituresrelated to disaster grants are reported when the System has expended the necessary funds and theFederal Emergency Management Agency (FEMA) has approved the expenditures for reimbursement.Expenditures on the Schedule that occurred prior to the reporting period and approved by FEMA duringthe reporting period were $3,740,513. De Minimis Rate Used: N Rate Explanation: The System has not elected to use the 10% de minimis indirect cost rate. For the U.S. Department of Health and Human Service (HHS) award related to the Provider Relief Fundand American Rescue Plan (ARP) Rural Distribution (PRF) program, the HHS has indicated the amountson the Schedule be reported corresponding to reporting requirements of the Health Resources andServices Administration (HRSA) PRF Reporting Portal. Payments from the HHS for PRF are assigned to'Payment Received Periods' (each, a Period) based upon the date each payment from the PRF wasreceived. Each Period has a specified Period of Availability and timing of reporting requirements. Entitiesreport into the HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after theend of the Period of Availability).The Schedule includes $2,397,059 received from the HHS between July 1, 2020, and December 31,2020. In accordance with guidance from the HHS, these amounts were presented as Period 2. TheSchedule also includes $5,733,634 received from the HHS between January 1, 2021, and June 30, 2021In accordance with guidance from the HHS, these amounts were presented as Period 3. Such amountswere recognized as other revenue in the System's consolidated financial statements for the years endedSeptember 30, 2021.Below is a list of providers and their associated Taxpayer Identification Numbers (TINs) included in theSystem's Provider Relief Funds reporting:Provider Name Taxpayer Identification NumberHerbert J Thomas Memorial Hospital Association 550404900Charleston Hospital, Inc dba Saint Francis Hospital 611272692THS Physician Partners, Inc. 454395947

Finding Details

Finding 2022-001

2022-001: Significant Deficiency in Internal Controls Over Compliance Program COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 Federal Agency U.S. Department of Health and Human Services Award Number N/A Award Year 2021 and 2020 Compliance Requirement Reporting Questioned Costs N/A Repeat of Prior Year Finding 2021-001 Criteria All recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context The System did not complete the PRF reporting for Period 2 in accordance with the U.S. Department of Health and Human Services guidance due to errors in the underlying data that lead to errors in the Period 2 report that was submitted. In the period 2 Submission, the System reported $2,283,650 of COVID-19 expenses, but failed to reduce the expenses by amounts reimbursed by other sources. Management updated their policies and procedures prior to Reporting Period 3 to address this issue. The System had $42,620,438 of lost revenue through Period 2 reporting and has received $17,690,624 in PRF payments.Effect The amounts reported to HRSA during Period 2 reporting were not in accordance with established U.S. Department of Health and Human Services guidance. Cause The System has insufficient controls in place to identify and correct errors before reporting for Period 2 was completed. Recommendation We recommend that Management to continue to follow their newly established policy and procedures to ensure that the most recent guidelines are reviewed and understood and that all information is detail reviewed and errors addressed before reporting. View of Responsible Officials Management agrees with the finding, and policy and procedures were updated before reporting Period 3. Period 3 and 4 reporting were completed in accordance with the U.S. Department of Health and Human Services most guidance. The System received a notice from the Department of Health & Human Services dated December 29, 2022 that HRSA's Division of Financial Integrity has determined that the findings cited in the Single Audit Report for fiscal year October 1, 2020 through September 30, 2021 has been satisfactorily resolved.

Finding 2022-001

2022-001: Significant Deficiency in Internal Controls Over Compliance Program COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 Federal Agency U.S. Department of Health and Human Services Award Number N/A Award Year 2021 and 2020 Compliance Requirement Reporting Questioned Costs N/A Repeat of Prior Year Finding 2021-001 Criteria All recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context The System did not complete the PRF reporting for Period 2 in accordance with the U.S. Department of Health and Human Services guidance due to errors in the underlying data that lead to errors in the Period 2 report that was submitted. In the period 2 Submission, the System reported $2,283,650 of COVID-19 expenses, but failed to reduce the expenses by amounts reimbursed by other sources. Management updated their policies and procedures prior to Reporting Period 3 to address this issue. The System had $42,620,438 of lost revenue through Period 2 reporting and has received $17,690,624 in PRF payments.Effect The amounts reported to HRSA during Period 2 reporting were not in accordance with established U.S. Department of Health and Human Services guidance. Cause The System has insufficient controls in place to identify and correct errors before reporting for Period 2 was completed. Recommendation We recommend that Management to continue to follow their newly established policy and procedures to ensure that the most recent guidelines are reviewed and understood and that all information is detail reviewed and errors addressed before reporting. View of Responsible Officials Management agrees with the finding, and policy and procedures were updated before reporting Period 3. Period 3 and 4 reporting were completed in accordance with the U.S. Department of Health and Human Services most guidance. The System received a notice from the Department of Health & Human Services dated December 29, 2022 that HRSA's Division of Financial Integrity has determined that the findings cited in the Single Audit Report for fiscal year October 1, 2020 through September 30, 2021 has been satisfactorily resolved.