Audit 323107

Title: NOTE A - BASIS OF PRESENTATION Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of MVP Health Plan, Inc. (the Company), and is presented on the accrual basis of accounting. The information in the 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). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Company did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance. The accompanying schedule of expenditures of federal awards includes the federal grant activity of MVP Health Plan, Inc. (the Company), and is presented on the accrual basis of accounting. The information in the 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). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the basic financial statements.

Title: NOTE B - CHILDREN’S HEALTH INSURANCE PROGRAM (CFDA 93.767) Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of MVP Health Plan, Inc. (the Company), and is presented on the accrual basis of accounting. The information in the 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). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Company did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance. The State of New York, through the Department of Health (DOH), provides funding to the Company to provide and administer the Children’s Health Insurance Program (CHP) for uninsured children. The funding for the program is provided through the payment of monthly premiums for each eligible enrollee. The purpose of the Children’s Health Insurance Program is to provide funds to states to enable them to initiate and expand the provision of child health insurance to uninsured, low-income families. The expenditures reported on the schedule represent the U.S. Department of Health and Human Service’s portion of the premiums received by the Company for each eligible enrollee

Title: NOTE C - INDIRECT COST RATE Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of MVP Health Plan, Inc. (the Company), and is presented on the accrual basis of accounting. The information in the 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). Therefore, some amounts presented in the schedule may differ from amounts presented in or used in the preparation of the basic financial statements. De Minimis Rate Used: N Rate Explanation: The Company did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance. The Company did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance.