Audit 345762

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 2 TIN #736060815 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority selected Option 1, as defined by HRSA, to calculate lost revenue. This option consists of reporting actual revenues from relevant quarters in the period of availability with the system calculating the lost revenues because of declines. The fiscal year 2021 single audit identified unallowable expenses totaling $263,861. The Company utilized excess lost revenues at the time to cover this difference. To capture the use of these lost revenues from Period 1, the Authority should have used Option 3, as defined by HRSA, to calculate and report lost revenues. Within that calculation, lost revenues could then be reduced by the $263,861. Cause: The Authority's Period 2 report to HRSA was filed prior to the completion of the 2021 single audit and identification of these unallowable expenses. Effect: The reporting to HRSA for Period 2 was considered incorrect. The Authority did not reduce lost revenues by amounts used in the prior period on unallowable expenses. While the effects of the report errors did not result in unallowable lost revenues during Period 2, errors to amounts reported for lost revenues could result in unallowable costs. Questioned Costs: None reported. Context/Sampling: All key line items on the Period 2 report to HRSA were tested. Repeat Finding from Prior Years: No. Recommendation: We recommend the Authority report on lost revenues for any future reporting to HRSA utilizing Option 3 in order to show the use of the unallowable expenses from Period 1. Views 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 2 TIN #736060815 Reporting Material Weakness in Internal Control Over Compliance and Noncompliance Deemed Not Material Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority tracked patient care revenues internally within a spreadsheet. The calculations of revenue by payor within the spreadsheet and included on the Period 2 report to HRSA, which were utilized to calculate lost revenues, contained errors. Cause: The Authority’s internal controls in place to review the lost revenue calculation prior to finalization of the HRSA Period 2 submission did not identify errors in the calculation. Additionally, the review and approval of the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 was not performed by someone other than the preparer, resulting in the errors in patient revenue by payor not being detected. Effect: The reporting to HRSA for Period 2 contained errors in patient care revenue by payor, which are considered key line items in that report. While the result of the errors did not impact lost revenues calculated, there is a potential for similar errors to impact the lost revenue calculation. In addition, the lack of review of the report increases the possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None. While there were errors in patient care revenues by payors for certain key line items, the errors did not impact the calculation of lost revenues. Context: All key line items related to the calculation of lost revenues based on an Option 1 calculation, as defined by HRSA, were tested. Errors were identified in 8 key line items specifically related to patient care revenues by payor for two separate quarters. The errors did not impact the total revenue reported for any quarter. Repeat Finding from Prior Years: No Recommendation: We recommend management implement policies and procedures to ensure a complete revenue of supporting documentation and any reporting to a federal agency prior to submission by an individual separate from the preparer. Views 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 2 TIN #736060815 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority selected Option 1, as defined by HRSA, to calculate lost revenue. This option consists of reporting actual revenues from relevant quarters in the period of availability with the system calculating the lost revenues because of declines. The fiscal year 2021 single audit identified unallowable expenses totaling $263,861. The Company utilized excess lost revenues at the time to cover this difference. To capture the use of these lost revenues from Period 1, the Authority should have used Option 3, as defined by HRSA, to calculate and report lost revenues. Within that calculation, lost revenues could then be reduced by the $263,861. Cause: The Authority's Period 2 report to HRSA was filed prior to the completion of the 2021 single audit and identification of these unallowable expenses. Effect: The reporting to HRSA for Period 2 was considered incorrect. The Authority did not reduce lost revenues by amounts used in the prior period on unallowable expenses. While the effects of the report errors did not result in unallowable lost revenues during Period 2, errors to amounts reported for lost revenues could result in unallowable costs. Questioned Costs: None reported. Context/Sampling: All key line items on the Period 2 report to HRSA were tested. Repeat Finding from Prior Years: No. Recommendation: We recommend the Authority report on lost revenues for any future reporting to HRSA utilizing Option 3 in order to show the use of the unallowable expenses from Period 1. Views 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 2 TIN #736060815 Reporting Material Weakness in Internal Control Over Compliance and Noncompliance Deemed Not Material Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority tracked patient care revenues internally within a spreadsheet. The calculations of revenue by payor within the spreadsheet and included on the Period 2 report to HRSA, which were utilized to calculate lost revenues, contained errors. Cause: The Authority’s internal controls in place to review the lost revenue calculation prior to finalization of the HRSA Period 2 submission did not identify errors in the calculation. Additionally, the review and approval of the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 was not performed by someone other than the preparer, resulting in the errors in patient revenue by payor not being detected. Effect: The reporting to HRSA for Period 2 contained errors in patient care revenue by payor, which are considered key line items in that report. While the result of the errors did not impact lost revenues calculated, there is a potential for similar errors to impact the lost revenue calculation. In addition, the lack of review of the report increases the possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None. While there were errors in patient care revenues by payors for certain key line items, the errors did not impact the calculation of lost revenues. Context: All key line items related to the calculation of lost revenues based on an Option 1 calculation, as defined by HRSA, were tested. Errors were identified in 8 key line items specifically related to patient care revenues by payor for two separate quarters. The errors did not impact the total revenue reported for any quarter. Repeat Finding from Prior Years: No Recommendation: We recommend management implement policies and procedures to ensure a complete revenue of supporting documentation and any reporting to a federal agency prior to submission by an individual separate from the preparer. Views of Responsible Officials: Management agrees with the finding.