Audit 311307

Finding 2021.004 Program Name/CFDA Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Hospital did not meet its requirements to use the funds to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus.Context: During the audit, it was determined that there were a number of expenditures claimed as allowable COVID-19 expenses on the submission of expenses to the Health Resources and Services Agency (HRSA) without deducting for cost-reimbursement received from the Medicare program for the same items. The full amount of these expenditures are not an allowable COVID-19 expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds until after other applicable payor sources, such as Medicare program cost-reimbursement for being a Critical Access Hospital and Rural Health Clinic are accounted for. In addition, there are a minor amount of expenses with the submission of allowable expenses to HRSA which were included in duplicate or non-allowable based on other terms and conditions of the U.S. Department of Health and Human Services Provider Relief Funds. However, in review of all of these findings in the aggregate, it was noted that there was more than adequate amounts of lost revenue which could have been used in place of these expense items. The net of all of these items would have resulted in no recoupment by HRSA related to allowable COVID-19 expenses, but the reporting categories and tracking by management should be updated. Cause: Management oversight. Effect: The Hospital is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Recommendation: We recommend that management review all the submitted expenses and lost revenue amounts for allowability under the criteria provided by the U.S. Department of Health and Human Services, and update its internal HRSA reporting as this may impact the ability to claim future expenses and/or lost revenues related to future Provider Relief Fund amounts received.

Finding 2021.005 Program Name/CFDA Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Condition: The Hospital did not meet its requirements related to timely reporting and filing of financial information, including audited financial statements, for the year ended September 30, 2021. Criteria: All programs which require compliance with Uniform Guidance audits require that a financial statement audit and related Uniform Guidance audits, and their related required reports and findings be filed with the federal audit clearinghouse not later than nine months following the end of a fiscal year, unless an extension has been granted.Context: During the audit, it was determined that because the Hospital had not completed several years of audits and was working on catching up these audits in 2024, the Uniform Guidance audit and its related financial statement audit for the year ended September 30, 2021, were not filed timely in 2022 and remained outstanding until being filed along with the financial statement and Uniform Guidance audit for the year ended September 30, 2023 in June of 2024. The Hospital also has additional financial statement findings related to internal controls and a disclaimer of opinion on the financial statement audit for the year ended September 30, 2021 which are also related to these delayed filings. Cause: Management oversight. Effect: The Hospital is not in compliance with federal regulations and guidelines surrounding the required reporting and audits related the Provider Relief Funds it received and expended in 2021. Recommendation and Current Status: We recommend that management continue to work to catch up required audits and related reporting. Management has completed required financial statement and Uniform Guidance audits which were required through September 30, 2023 in June 2024 and is working to correct financial statement findings toward achieving an unmodified opinion on the financial statements in the future, assuming all proper support is gathered and maintained, as well as improved procedures and policies.

Finding 2021.004 Program Name/CFDA Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Hospital did not meet its requirements to use the funds to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus.Context: During the audit, it was determined that there were a number of expenditures claimed as allowable COVID-19 expenses on the submission of expenses to the Health Resources and Services Agency (HRSA) without deducting for cost-reimbursement received from the Medicare program for the same items. The full amount of these expenditures are not an allowable COVID-19 expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds until after other applicable payor sources, such as Medicare program cost-reimbursement for being a Critical Access Hospital and Rural Health Clinic are accounted for. In addition, there are a minor amount of expenses with the submission of allowable expenses to HRSA which were included in duplicate or non-allowable based on other terms and conditions of the U.S. Department of Health and Human Services Provider Relief Funds. However, in review of all of these findings in the aggregate, it was noted that there was more than adequate amounts of lost revenue which could have been used in place of these expense items. The net of all of these items would have resulted in no recoupment by HRSA related to allowable COVID-19 expenses, but the reporting categories and tracking by management should be updated. Cause: Management oversight. Effect: The Hospital is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Recommendation: We recommend that management review all the submitted expenses and lost revenue amounts for allowability under the criteria provided by the U.S. Department of Health and Human Services, and update its internal HRSA reporting as this may impact the ability to claim future expenses and/or lost revenues related to future Provider Relief Fund amounts received.

Finding 2021.005 Program Name/CFDA Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Condition: The Hospital did not meet its requirements related to timely reporting and filing of financial information, including audited financial statements, for the year ended September 30, 2021. Criteria: All programs which require compliance with Uniform Guidance audits require that a financial statement audit and related Uniform Guidance audits, and their related required reports and findings be filed with the federal audit clearinghouse not later than nine months following the end of a fiscal year, unless an extension has been granted.Context: During the audit, it was determined that because the Hospital had not completed several years of audits and was working on catching up these audits in 2024, the Uniform Guidance audit and its related financial statement audit for the year ended September 30, 2021, were not filed timely in 2022 and remained outstanding until being filed along with the financial statement and Uniform Guidance audit for the year ended September 30, 2023 in June of 2024. The Hospital also has additional financial statement findings related to internal controls and a disclaimer of opinion on the financial statement audit for the year ended September 30, 2021 which are also related to these delayed filings. Cause: Management oversight. Effect: The Hospital is not in compliance with federal regulations and guidelines surrounding the required reporting and audits related the Provider Relief Funds it received and expended in 2021. Recommendation and Current Status: We recommend that management continue to work to catch up required audits and related reporting. Management has completed required financial statement and Uniform Guidance audits which were required through September 30, 2023 in June 2024 and is working to correct financial statement findings toward achieving an unmodified opinion on the financial statements in the future, assuming all proper support is gathered and maintained, as well as improved procedures and policies.