Audit 308059

Title: Note A - Basis of Presentation Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (SEFA) for the year ended December 31, 2023 includes the federal grant activity that Fairfield Medical Center & Subsidiaries, (collectively the “Organization”) received and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements.

Title: Note C – Amounts Passed Through to Subrecipients Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Organization did not pass through any federal awards to subrecipients.

Title: Note D – Provider Relief Fund and American Rescue Plan Reporting Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Under the terms and conditions of the Provider Relief Funds (PRF), the Organization was required to report the Coronavirus (COVID-19) related expenses and lost revenue to the U.S. Department of Health and Human Services (HHS)/Health Resources and Services Administration (HRSA). Guidance from HHS/HRSA has required the reporting of the COVID-19 related expenses and lost revenue in certain reporting periods based on when the funds were received. The 2023 SEFA includes PRF of $7,290,532, which was received by the Organization between January 1, 2022 and June 30, 2022, the dates designated by HHS/HRSA for its fifth PRF reporting period. The Organization recognized $0 and $7,290,532, respectively, as revenue in its 2023 and 2022 consolidated statements of operations and changes in net assets as the terms and conditions of the PRF grant were satisfied by the Organization.

Title: Note E – Fair Market Value of Donated Personnel Protective Equipment (Unaudited) Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. During 2023, the Organization did not receive donated personnel protective equipment from federal sources.