Audit 317379

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN#550559322 Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards and accompanying notes to the schedule of expenditures of federal awards. Condition: The Clinic does not have an internal control system designed to ensure the schedule of expenditures of federal awards is complete and accurate. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Clinic meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Clinic would not be able to draft a complete and accurate schedule of expenditures of federal awards without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: We recommend management continually be aware of the financial reporting requirements relating to the Clinic’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN#550559322 Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the original expenditure listing which would have included the review of the expenditure listing, was not retained. As a part of the single audit, the Clinic recreated the expenditure listing to support the expenditures reported on the special report submitted to the Department of Health and Human Services for Period 4, however there was no control in place to retain the original documentation of the determination of expenditures and their related review. In addition, there was no retained documentation of the review and approval of the Clinic’s special report submitted to the Department of Health and Human Services for Period 4 TIN #550559322. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listing and special report was documented and retained. In addition, the Clinic did not have an internal control policy in place to retain the original expenditure listing used to support the expenditures claimed on the special report. Effect: The lack of adequate policies governing review and approval over the expenditure listing and special report, and the retention of that listing and review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $128,988 of $1,113,840 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. There was one special report which was tested. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listing, and special report are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN#550559322 Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards and accompanying notes to the schedule of expenditures of federal awards. Condition: The Clinic does not have an internal control system designed to ensure the schedule of expenditures of federal awards is complete and accurate. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Clinic meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Clinic would not be able to draft a complete and accurate schedule of expenditures of federal awards without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: We recommend management continually be aware of the financial reporting requirements relating to the Clinic’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN#550559322 Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the original expenditure listing which would have included the review of the expenditure listing, was not retained. As a part of the single audit, the Clinic recreated the expenditure listing to support the expenditures reported on the special report submitted to the Department of Health and Human Services for Period 4, however there was no control in place to retain the original documentation of the determination of expenditures and their related review. In addition, there was no retained documentation of the review and approval of the Clinic’s special report submitted to the Department of Health and Human Services for Period 4 TIN #550559322. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listing and special report was documented and retained. In addition, the Clinic did not have an internal control policy in place to retain the original expenditure listing used to support the expenditures claimed on the special report. Effect: The lack of adequate policies governing review and approval over the expenditure listing and special report, and the retention of that listing and review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $128,988 of $1,113,840 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. There was one special report which was tested. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listing, and special report are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. View of Responsible Officials: Management agrees with the finding.