Audit 36622

2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and Period 3 TIN #410694689 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Hospital District does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Hospital District meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital District would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Hospital District is aware of this condition for financial reporting requirements relating to the Hospital District?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2022-004 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and 3 TIN #410694689 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. Condition: The Hospital District?s lost revenue reported within the special reports submitted to the Department of Health and Human Services for Period 2 and Period 3 TIN#410694689 is overstated. Cause: The Hospital District did not reduce the lost revenue by the amount of questioned costs identified under Period 1 TIN#410694689 which totaled $307,910. The Period 2 and Period 3 lost revenue reported was not adjusted due to management?s understanding that lost revenue was not available to be utilized on the nursing home infection control distributions. In addition, the Period 2 report was filed with the Department of Health and Human Services during March 2022 which was prior to the completion of the single audit testing relating to Period 1 completed in June 2022. Effect: The lost revenue reported within the special reports submitted to the Department of Health and Human Services for Period 2 and Period 3 TIN#410694689 is overstated. Questioned Costs: None reported. The lost revenue was not available to be utilized under the nursing home infection control distributions received in Period 2 and Period 3. Context/Sampling: Key line items including expenditures and lost revenue were tested on the Period 2 and Period 3 Department of Health and Human Services special reports. Repeat Finding from Prior Years: Yes Recommendation: All required reports have been filed to the federal agency as of the date of this report. We recommend the Hospital District retain documentation of the revised lost revenue calculation which includes the adjustment for the Period 1 identified questioned costs in their internal records. Views of Responsible Officials: Management agrees with the finding.

2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and Period 3 TIN #410694689 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Hospital District does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Hospital District meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital District would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Hospital District is aware of this condition for financial reporting requirements relating to the Hospital District?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and Period 3 TIN #410694689 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Hospital District does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Hospital District meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital District would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Hospital District is aware of this condition for financial reporting requirements relating to the Hospital District?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2022-004 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and 3 TIN #410694689 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. Condition: The Hospital District?s lost revenue reported within the special reports submitted to the Department of Health and Human Services for Period 2 and Period 3 TIN#410694689 is overstated. Cause: The Hospital District did not reduce the lost revenue by the amount of questioned costs identified under Period 1 TIN#410694689 which totaled $307,910. The Period 2 and Period 3 lost revenue reported was not adjusted due to management?s understanding that lost revenue was not available to be utilized on the nursing home infection control distributions. In addition, the Period 2 report was filed with the Department of Health and Human Services during March 2022 which was prior to the completion of the single audit testing relating to Period 1 completed in June 2022. Effect: The lost revenue reported within the special reports submitted to the Department of Health and Human Services for Period 2 and Period 3 TIN#410694689 is overstated. Questioned Costs: None reported. The lost revenue was not available to be utilized under the nursing home infection control distributions received in Period 2 and Period 3. Context/Sampling: Key line items including expenditures and lost revenue were tested on the Period 2 and Period 3 Department of Health and Human Services special reports. Repeat Finding from Prior Years: Yes Recommendation: All required reports have been filed to the federal agency as of the date of this report. We recommend the Hospital District retain documentation of the revised lost revenue calculation which includes the adjustment for the Period 1 identified questioned costs in their internal records. Views of Responsible Officials: Management agrees with the finding.

2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 and Period 3 TIN #410694689 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Hospital District does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Hospital District meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital District would not be able to draft a complete and accurate schedule. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Hospital District is aware of this condition for financial reporting requirements relating to the Hospital District?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.