Audit 320703

Title: Federal Emergency Management Agency: Disaster Grants Accounting Policies: The accompanying schedules of expenditures of federal and state awards (the Schedules) include the federal and state grant activity of AtlantiCare Health System, Inc. and Affiliates (AtlantiCare) for the year ended December 31, 2023, recorded on the accrual basis of accounting. The information in the Schedules 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 (the Uniform Guidance) and New Jersey OMB Circular Letter 15-08-OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid (Circular Letter 15-08-OMB). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on the program-specific guidance (see Note 2). Therefore, some amounts presented in the Schedules may differ from amounts presented in, or used in the presentation of, the consolidated financial statements of AtlantiCare. For purposes of the Schedules, federal and state awards include any assistance provided by a federal and state agency directly or indirectly in the form of grants, contracts, cooperative agreements, loans and loan guarantees, or other non-cash assistance. Federally funded amounts that are passed through state agencies are included on the schedule of expenditures of federal awards and are excluded from the schedule of expenditures of state awards. Determinations as to the level of federal and state funding have been made based on communications of funding levels provided by the pass-through agencies. In certain circumstances, the funding levels communicated are estimated and subject to finalization upon the completion of the budget period for the program. Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, AtlantiCare did not make this election and uses a negotiated indirect cost rate. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. AtlantiCare incurred certain expenditures related to the COVID-19 pandemic which are eligible for reimbursement from the U.S. Department of Homeland Security – Federal Emergency Management Agency (FEMA) Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Assistance Listing No. 97.036). In January 2023, AtlantiCare submitted an application for reimbursement of qualifying expenses under the FEMA program and received approximately $4.5 million for expenses incurred during calendar years 2021 and 2022. This amount has been included in the accompanying schedule of expenditures of federal awards for the year ended December 31, 2023, in accordance with the guidance specific to Assistance Listing No. 97.036