Audit 360565

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Applicable Federal Award Number and Year – Period 6 TIN #205330283 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 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. The Care Center selected Option I to calculate lost revenue which consists of comparing actual quarterly revenues in calendar years 2020, 2021, 2022, and January through June 2023 to actual quarterly revenues in calendar year 2019. Condition: The Care Center does not have an internal control system designed to ensure the amounts reported in the HHS Period 6 Special Report agreed to supporting documentation for each of those quarters. In addition, there was no evidence of review of either the supporting documentation or the HHS Period 6 Special Report by someone other than the preparer. Cause: The Care Center did not have adequate internal controls to ensure the lost revenue calculation agreed with the supporting documentation prior to submission to HHS. Effect: Revenue information for eighteen quarters (starting January 1, 2019, through June 30, 2023) was submitted on the HHS Period 6 Special Report. The revenue information for three quarters during that timeframe did not agree to the supporting documentation provided. The quarters with significant differences are as follows: Quarter 2, 2021 (April through June) Variance of $27,885 Quarter 1, 2023 (January through March) Variance of $22,236 Quarter 2, 2023 (April through June) Variance of $688,293 In these three quarters, the revenue submitted on the HHS Period 6 Special Report exceeded the amount of revenue supported by the financial information. The total variance for these three quarters was $738,397. Questioned Costs: None reported, as the Care Center used qualifying expenditures to support the provider relief funding received and not lost revenue. Context: Key line items were tested on the HHS Period 6 Special Report. Repeat Finding from Prior Years: No Recommendation: We recommend management enhance internal controls to ensure the revenue calculation agrees to the supporting documentation prior to submission. In addition, we recommend that there is a review of both the supporting documentation and any reports submitted by a person other than the preparer prior to submission. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Applicable Federal Award Number and Year – Period 6 TIN #205330283 Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 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. The Care Center claimed expenses based on specifically identified COVID related expenses. Condition: During our testing, we noted there was no formal review or approval of the expenditure spreadsheet used to calculate the expenditures claimed for the federal program outside of the preparer. In addition, we noted the individual transactions were also not reviewed or approved by someone outside of the business office manager. Cause: The Care Center did not have adequate internal controls to ensure review and approval over the expenditure spreadsheet or individual transactions was completed and retained. Effect: The lack of adequate policies governing 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: Detail testing was performed over eligible expenditures which included a population of 162 expenditures which totaled $211,843. A sample of 33 of the 162 expenditures was tested and the total of the items tested was $35,345. Repeat Finding from Prior Years: No Recommendation: We recommend management enhance internal controls to ensure that formal documentation of reviews is present for all supporting documentation. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Applicable Federal Award Number and Year – Period 6 TIN #205330283 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 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. The Care Center selected Option I to calculate lost revenue which consists of comparing actual quarterly revenues in calendar years 2020, 2021, 2022, and January through June 2023 to actual quarterly revenues in calendar year 2019. Condition: The Care Center does not have an internal control system designed to ensure the amounts reported in the HHS Period 6 Special Report agreed to supporting documentation for each of those quarters. In addition, there was no evidence of review of either the supporting documentation or the HHS Period 6 Special Report by someone other than the preparer. Cause: The Care Center did not have adequate internal controls to ensure the lost revenue calculation agreed with the supporting documentation prior to submission to HHS. Effect: Revenue information for eighteen quarters (starting January 1, 2019, through June 30, 2023) was submitted on the HHS Period 6 Special Report. The revenue information for three quarters during that timeframe did not agree to the supporting documentation provided. The quarters with significant differences are as follows: Quarter 2, 2021 (April through June) Variance of $27,885 Quarter 1, 2023 (January through March) Variance of $22,236 Quarter 2, 2023 (April through June) Variance of $688,293 In these three quarters, the revenue submitted on the HHS Period 6 Special Report exceeded the amount of revenue supported by the financial information. The total variance for these three quarters was $738,397. Questioned Costs: None reported, as the Care Center used qualifying expenditures to support the provider relief funding received and not lost revenue. Context: Key line items were tested on the HHS Period 6 Special Report. Repeat Finding from Prior Years: No Recommendation: We recommend management enhance internal controls to ensure the revenue calculation agrees to the supporting documentation prior to submission. In addition, we recommend that there is a review of both the supporting documentation and any reports submitted by a person other than the preparer prior to submission. View of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Applicable Federal Award Number and Year – Period 6 TIN #205330283 Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 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. The Care Center claimed expenses based on specifically identified COVID related expenses. Condition: During our testing, we noted there was no formal review or approval of the expenditure spreadsheet used to calculate the expenditures claimed for the federal program outside of the preparer. In addition, we noted the individual transactions were also not reviewed or approved by someone outside of the business office manager. Cause: The Care Center did not have adequate internal controls to ensure review and approval over the expenditure spreadsheet or individual transactions was completed and retained. Effect: The lack of adequate policies governing 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: Detail testing was performed over eligible expenditures which included a population of 162 expenditures which totaled $211,843. A sample of 33 of the 162 expenditures was tested and the total of the items tested was $35,345. Repeat Finding from Prior Years: No Recommendation: We recommend management enhance internal controls to ensure that formal documentation of reviews is present for all supporting documentation. View of Responsible Officials: Management agrees with the finding.