Audit 309406

Title: 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule 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. Expenditures for the Provider Relief Fund (PRF) are based upon the PRF reports for the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Scotland Health Care System (the Corporation) under programs of the federal government for the year ended September 30, 2023. The information in this Schedule 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 (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Corporation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Corporation.

Title: 4. Contingencies Accounting Policies: Expenditures reported on the Schedule 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. Expenditures for the Provider Relief Fund (PRF) are based upon the PRF reports for the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The grant programs are subject to financial and compliance audits by the grantors or their representatives. Such audits could lead to requests for reimbursement to the grantor agencies for expenditures disallowed under terms of the grants. Management believes disallowances, if any, will not be material.

Title: 5. Categorization of Expenditures and Other Matters Accounting Policies: Expenditures reported on the Schedule 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. Expenditures for the Provider Relief Fund (PRF) are based upon the PRF reports for the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The categorization of expenditures by program included in the Schedule is based upon the grant documents. Changes in the categorization of expenditures occur based upon revisions to the Assistance Listing, which is issued typically in June and December of each year. The Schedule for the year ended September 30, 2023 reflects Assistance Listing changes through May 2023.

Title: Provider Relief Funds Accounting Policies: Expenditures reported on the Schedule 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. Expenditures for the Provider Relief Fund (PRF) are based upon the PRF reports for the year ended September 30, 2023. De Minimis Rate Used: N Rate Explanation: The Corporation has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. As outlined in the May 2023 OMB Compliance Supplement, the amounts reported in the accompanying Schedule related to the PRF Assistance Listing No. 93.498, are reported based upon the PRF reporting portal submission guidelines established by the Health Resource and Service Administration (HRSA). Seven separate reporting periods were established by HRSA based on the dates of receipt of PRF payments. Each reporting period has a specific period of availability which begins on January 1, 2020 and extends through specified deadlines, as indicated below: The accompanying Schedule includes those qualifying expenditures and lost revenues that were reported in the HRSA PRF portal for Period 4. Of that amount, approximately $510,000 and $7,579,000 in PRF payments were recognized by the Corporation in their combined statements of operations as nonoperating income during the year ended September 30, 2023 and 2022, respectively.