Audit 292786

Title: Disaster Grants Public Assistance Program (ALN 97.036) Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of Covenant HealthCare System and Subsidiaries ("Covenant HealthCare") under programs of the federal government for the year ended June 30, 2023. The information in the 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 (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of the Covenant HealthCare, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Covenant HealthCare. Expenditures reported in the Schedule are reported on accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement, except for expenditures related to Assistance Listing Number (ALN) 93.498, Provider Relief Fund and American Rescue Plan Rural Distribution (PRF). PRF does not apply the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards but rather applies the U.S. Department of Health and Human Services (HHS) guidance and frequently asked questions as outlined in the Compliance Supplement. For the PRF program, HHS has indicated that the amounts on the Schedule should be reported in correspondence with reporting requirements of the HHS PRF Portal, Payments from HHS for PRF are assigned a payment received period based upon the date of each payment from PRF was received. Each period has a specified period of availability and timing of reporting requirements. The pass-through entity identifying numbers are presented where available. Covenant HealthCare has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Covenant HealthCare has elected not to use the 10 percent de minimis indirect cost rate to recover indirect costs as allowed under the Uniform Guidance. All of the Disaster Grants Public Assistance grant (ALN 97.036) expenditures included in the Schedule for the year ended June 30, 2023 were incurred in previous fiscal years. The project worksheets for these expenditures were approved in the current fiscal year, and these expenditures have been reported in the current fiscal year in accordance with the reporting requirements outlined in the 2023 Compliance Supplement.