Title: (1) Basis of Presentation
Accounting Policies: The significant accounting policies used in preparing the SEFA were the following: Cost Accounting principles contained in the Uniform Guidance and Cost Principles for Non-Profit Organizations (2 CFR part 230). Under these cost principles, certain types of expenditures are not allowed or are limited as to reimbursement. Expenditures include a portion of costs associated with general institute activities (facilities and administrative costs or indirect costs), which are allocated to federal awards under negotiated formulas commonly referred to as facilities and administrative cost rates.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate. We have an agreed upon rate of 49%.
The purpose of the schedule of expenditures of federal awards (the Schedule) is to present those activities of Allina Health System (the System) for the year ended December 31, 2023, which have been financed by the U.S. government. For purposes of the Schedule, federal awards include all federal assistance entered into directly between the System and the federal government and subawards from nonfederal organizations made under federally sponsored agreements. The Schedule does not include payments received under Medicare and Medicaid reimbursement programs. Since the Schedule presents only a selected portion of the activities of the System, it is not intended to, and does not, present the consolidated financial position, revenue and expenses, changes in net assets, and cash flows of the System.
Expenditures are recognized as incurred using the accrual method of accounting, except for PRF whose accounting is described below.
Title: (2) Relationship to the Consolidated Financial Statements
Accounting Policies: The significant accounting policies used in preparing the SEFA were the following: Cost Accounting principles contained in the Uniform Guidance and Cost Principles for Non-Profit Organizations (2 CFR part 230). Under these cost principles, certain types of expenditures are not allowed or are limited as to reimbursement. Expenditures include a portion of costs associated with general institute activities (facilities and administrative costs or indirect costs), which are allocated to federal awards under negotiated formulas commonly referred to as facilities and administrative cost rates.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate. We have an agreed upon rate of 49%.
Federal awards revenue is reported as other revenue in the consolidated financial statements of the System.
Title: (3) Indirect Cost Rates
Accounting Policies: The significant accounting policies used in preparing the SEFA were the following: Cost Accounting principles contained in the Uniform Guidance and Cost Principles for Non-Profit Organizations (2 CFR part 230). Under these cost principles, certain types of expenditures are not allowed or are limited as to reimbursement. Expenditures include a portion of costs associated with general institute activities (facilities and administrative costs or indirect costs), which are allocated to federal awards under negotiated formulas commonly referred to as facilities and administrative cost rates.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate. We have an agreed upon rate of 49%.
Expenditures for federal programs are subject to the provisions of Title 2 U.S Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Under these cost principles, certain types of expenditures are not allowed or are limited as to reimbursement. Expenditures include a portion of costs associated with general institute activities (facilities and administrative costs or indirect costs), which are allocated to federal awards under negotiated formulas commonly referred to as facilities and administrative cost rates. Facilities and administrative costs allocated to such awards for the year ended December 31, 2023 were based on provisional rates of 49% negotiated with the System’s oversight federal agency, the U.S. Department of Health and Human Services, and are included as a component of the expenditures in the Schedule. Lower facilities and administrative cost rates were used when specifically stated in respective grant agreements.
Title: (4) Provider Relief Fund
Accounting Policies: The significant accounting policies used in preparing the SEFA were the following: Cost Accounting principles contained in the Uniform Guidance and Cost Principles for Non-Profit Organizations (2 CFR part 230). Under these cost principles, certain types of expenditures are not allowed or are limited as to reimbursement. Expenditures include a portion of costs associated with general institute activities (facilities and administrative costs or indirect costs), which are allocated to federal awards under negotiated formulas commonly referred to as facilities and administrative cost rates.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate. We have an agreed upon rate of 49%.
The Provider Relief Fund (PRF) program is administered by the Health Resources and Services Administration to support eligible providers during the COVID-19 pandemic and was approved for funding originally under the Coronavirus Aid, Relief, and Economic Securities Act. Funds were provided to eligible
providers to support healthcare related expenses or lost revenues attributable to the Coronavirus without application but rather with terms and conditions. These terms and conditions required acceptance through an online portal or the funds were to be returned. The System accepted the terms and conditions.
The accompanying schedule of expenditures of Federal awards includes PRF for Reporting Period 5 (defined as payments received between January 1, 2022 to June 30, 2022) and Reporting Period 6 (defined as payments received between July 1, 2022 and December 31, 2022). The Tax Identification Number (TIN) that received PRF funds for Periods 5 and 6 is as follows: Allina Health System is 363261413.