Audit 294998

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Department of Health and Human Services Federal Financial Assistance Listing #93.778 Medicaid Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (schedule) and accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for a complete and accurate schedule being audited. As auditors, we were requested to draft the schedule and notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft the schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization’s schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Department of Health and Human Services Federal Financial Assistance Listing #93.778 Medicaid Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (schedule) and accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for a complete and accurate schedule being audited. As auditors, we were requested to draft the schedule and notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft the schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization’s schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s final eligible expenditure listing identified as eligible and claimed under the Provider Relief Fund program was not reviewed and approved by a separate individual outside of the preparer. In addition, the Organization’s special report submitted to the Department of Health and Human Services for Period 4 TIN #237224698 was not reviewed and approved by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure a secondary review and approval of the eligible expenditure listing was documented. In addition, the review and approval of the report submitted to the Department of Health and Human Services for Period 4 was not performed by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None noted. Context: A nonstatistical sample of 65 ($66,890) out of over 250 expenses ($899,557) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Year: Yes Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Department of Health and Human Services Federal Financial Assistance Listing #93.778 Medicaid Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (schedule) and accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for a complete and accurate schedule being audited. As auditors, we were requested to draft the schedule and notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft the schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization’s schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Department of Health and Human Services Federal Financial Assistance Listing #93.778 Medicaid Cluster Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (schedule) and accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for a complete and accurate schedule being audited. As auditors, we were requested to draft the schedule and notes to the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft the schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization’s schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year Period 4 TIN#237224698 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s final eligible expenditure listing identified as eligible and claimed under the Provider Relief Fund program was not reviewed and approved by a separate individual outside of the preparer. In addition, the Organization’s special report submitted to the Department of Health and Human Services for Period 4 TIN #237224698 was not reviewed and approved by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure a secondary review and approval of the eligible expenditure listing was documented. In addition, the review and approval of the report submitted to the Department of Health and Human Services for Period 4 was not performed by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None noted. Context: A nonstatistical sample of 65 ($66,890) out of over 250 expenses ($899,557) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Year: Yes Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.