Audit 300905

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.

This section identifies the audit findings required to be reported by 2 CFR 200 Section 516(a) of the Uniform Guidance (for example, significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs), as well as any abuse findings involving federal awards that are material to a major program. 2023-002 Preparation of Schedule of Expenditures of Federal Awards Identification of the Federal Programs: Assistance Listing Number (ALN) - 93.788 Opioid STR, from the U.S. Department of Health and Human Services passed through from the State of Tennessee Department of Mental Health and Substance Abuse Services, and ALN - 97.036 U.S. Department of Homeland Security - Disaster Grants - Public Assistance (Presidentially Declared Disasters). Criteria: 2 CFR 200.510 of the Uniform Guidance indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. In addition, 2 CFR Part 200.303 requires the entity to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition: Ballad did not have adequate controls in place to ensure the SEFA was accurate. The initial draft of the SEFA included expenditures for ALN - 93.788 that were accidentally “double-counted” in the SEFA. This resulted in expenditures on the SEFA being overstated by $188,242 for this program. The initial draft of the SEFA also included expenditures for ALN - 97.036 that were amounts required to be returned to the grantor agency and not expenditures. This resulted in expenditures on the SEFA being overstated by $312,092 for this program. Revisions to the SEFA were required to accurately present the federal expenditures for the period. Cause of Condition: Ballad did not perform an adequate review of the prepared SEFA and did not implement procedures to ensure the amounts recorded were complete and accurate in relation to the consolidated financial statements. Effect: If not corrected, inaccurate expenditures would have been reported to the federal government. In addition, the errors could result in improper selection of major program(s) for the Uniform Guidance audit. Context: There are no questioned costs associated with this finding. Auditor’s Recommendation: Ballad should establish formal procedures for determination of federal expenditures for inclusion in the SEFA. We further recommend training for those involved in the preparation and review of the SEFA to ensure that they are fully aware of the requirements related to SEFA preparation. Views of Responsible Officials and Planned Corrective Actions: Ballad Health will utilize technology efficiencies within upgraded accounting system to supplement reporting. Additionally, a resource will be added directly responsible for grant accounting. The SEFA will also be reviewed frequently to ensure accuracy.