Title: Federal Emergency Management Agency: Disaster Grants
Accounting Policies: The accompanying schedules of expenditures of federal and state awards (the Schedules) include the federal and state grant activity of AtlantiCare Health System, Inc. and Affiliates (AtlantiCare) for the year ended December 31, 2022, recorded on the accrual basis of accounting. The information in the Schedules 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) and New Jersey OMB Circular Letter 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (Circular Letter 15-08-OMB). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on the program-specific guidance (see Notes 2 and 3). Therefore, some amounts presented in the Schedules may differ from amounts presented in, or used in the presentation of, the consolidated financial statements of AtlantiCare. For purposes of the Schedules, federal and state awards include any assistance provided by a federal and state agency directly or indirectly in the form of grants, contracts, cooperative agreements, loans and loan guarantees, or other non-cash assistance. Federally funded amounts that are passed through state agencies are included on the schedule of expenditures of federal awards and are excluded from the schedule of expenditures of state awards.Determinations as to the level of federal and state funding have been made based on communications of funding levels provided by the pass-through agencies. In certain circumstances, the funding levels communicated are estimated and subject to finalization upon the completion of the budget period for the program. Effective October 1, 2022, AtlantiCare acquired John Brooks Recovery Center (JBRC). The Schedules are inclusive of JBRC federal and state grant activity from the acquisition date through December 31, 2022. Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, AtlantiCare did not make this election and uses a negotiated indirect cost rate.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
AtlantiCare incurred certain expenditures related to the COVID-19 pandemic which are eligible for reimbursement from the Federal Emergency Management Agency (FEMA) Disaster Grants Public Assistance (Presidentially Declared Disasters) (Assistance Listing No. 97.036). In July 2022, AtlantiCare submitted two applications for reimbursement of qualifying expenses under the FEMA program, and received $11.5 million for expenses incurred during calendar years 2020 and 2021. This amount has been included in the accompanying schedule of expenditures of federal awards for the year ended December 31, 2022 in accordance with the guidance specific to Assistance Listing No. 97.036.
Title: COVID-19 Provider Relief Fund
Accounting Policies: The accompanying schedules of expenditures of federal and state awards (the Schedules) include the federal and state grant activity of AtlantiCare Health System, Inc. and Affiliates (AtlantiCare) for the year ended December 31, 2022, recorded on the accrual basis of accounting. The information in the Schedules 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) and New Jersey OMB Circular Letter 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (Circular Letter 15-08-OMB). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on the program-specific guidance (see Notes 2 and 3). Therefore, some amounts presented in the Schedules may differ from amounts presented in, or used in the presentation of, the consolidated financial statements of AtlantiCare. For purposes of the Schedules, federal and state awards include any assistance provided by a federal and state agency directly or indirectly in the form of grants, contracts, cooperative agreements, loans and loan guarantees, or other non-cash assistance. Federally funded amounts that are passed through state agencies are included on the schedule of expenditures of federal awards and are excluded from the schedule of expenditures of state awards.Determinations as to the level of federal and state funding have been made based on communications of funding levels provided by the pass-through agencies. In certain circumstances, the funding levels communicated are estimated and subject to finalization upon the completion of the budget period for the program. Effective October 1, 2022, AtlantiCare acquired John Brooks Recovery Center (JBRC). The Schedules are inclusive of JBRC federal and state grant activity from the acquisition date through December 31, 2022. Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, AtlantiCare did not make this election and uses a negotiated indirect cost rate.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.
In accordance with the U.S. Department of Health and Human Services requirements specific to Federal Assistance Listing No. 93.498, COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, the amount presented on the accompanying schedule of expenditures of federal awards for the year ended December 31, 2022 for Federal Assistance Listing No. 93.498 relates to (i) Provider Relief Fund (PRF) payments received from January 1, 2021 through December 31, 2021 (ii) used for PRF-eligible activity from the period January 1, 2020 through December 31, 2022. This payment receipt period and activity period and the resulting amount presented on the accompanying schedule of expenditures of federal awards for the year ended December 31, 2022 reconciles to the PRF information previously reported to the Health Resources and Services Administration (HRSA) for PRF Reporting Periods 3 and 4 as follows: (see chart in the financial statements). The PRF-eligible expenses attributable to Coronavirus Disease 2019 (COVID-19) and lost revenues incurred by AtlantiCare during the period of availability through PRF Reporting Period 4 (January 1, 2020 through December 31, 2022) are in excess of the distributions received in PRF Reporting Periods 1 and 2 (which addressed payments received during April 10, 2020 to December 31, 2020, and previously reported on the schedule of expenditures of federal awards for the year ended December 31, 2021) and distributions received in PRF Reporting Periods 3 and 4 (January 1, 2021 through December 31, 2021) and, therefore, the amounts presented in the table above and on the accompanying schedule of expenditures of federal awards are limited to distributions received in PRF Reporting Periods 3 and 4. AtlantiCare also received PRF payments of $51,000 in PRF Reporting Period 5 (January 1, 2022 through June 30, 2022), which pursuant to the requirements specific to Federal Assistance Listing No. 93.498, are required to be excluded from the accompanying schedule of expenditures of federal awards for the year ended December 31, 2022.