Audit 30855

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, whereincertain types of expenditures are not allowable or are limited as to reimbursement. Cardinal has electednot to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (SEFA) for the year ended June 30, 2022includes the federal grant activity of Cardinal Services, Inc. of Indiana and Affiliates (Cardinal) and is presented on the accrual basis of accounting. The information in the SEFA is presented in accordance with the requirements of Title 2 US Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). The basic consolidated financial statement classifications may include other financial activity for reporting purposes. Therefore, some of the amounts presented in the SEFA may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements.

Title: SUBRECIPIENT PASS-THROUGH AND OTHER Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, whereincertain types of expenditures are not allowable or are limited as to reimbursement. Cardinal has electednot to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During 2022, Cardinal did not provide any federal awards to subrecipients. In addition, there were no federal awards expended in the form of non-cash assistance and there were no loan guarantees outstanding or extended during 2022.

Title: PROVIDER RELIEF FUNDS Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, whereincertain types of expenditures are not allowable or are limited as to reimbursement. Cardinal has electednot to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Under terms and conditions of the Provider Relief Funds (PRF) under the Coronavirus Aid, Relief, and Economic Security (CARES) and American Rescue Plan (ARP) Acts, Cardinal is required to report COVID-19related expenses and lost revenue to the US Department of Health and Human Services (HHS). Guidance from HHS has required the reporting of the COVID-19 related expenses and lost revenue in certain reporting periods based on when the funds were received. During 2022, Cardinal received PRF of approximately $892,000 and recognized this amount as revenue in its 2022 consolidated statement of activities and changes in net assets as the terms and conditions of the PRF grant were satisfied by Cardinal during 2022. HHS requires these PRF amounts be reported on the2023 SEFA rather than the 2022 SEFA. During 2021, Cardinal received PRF of approximately $327,000 and recognized this amount as revenue in its 2021 consolidated statement of activities and changes in net assets as the terms and conditions of the PRF grant were satisfied by Cardinal during 2021. HHS requires these PRF amounts be reported on the2022 SEFA rather than the 2021 SEFA.

Title: FAIR MARKET VALUE OF DONATED PERSONAL PROTECTIVE EQUIPMENT (UNAUDITED) Accounting Policies: Expenditures reported on the SEFA are reported on the accrual basis of accounting. Suchexpenditures are recognized following the cost principles contained in the Uniform Guidance, whereincertain types of expenditures are not allowable or are limited as to reimbursement. Cardinal has electednot to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During 2022, Cardinal did not receive donated personal protective equipment from federal sources.