Audit 366342

The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of Novant Health, Inc. and Affiliates (“Novant Health”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only the federal award activity of Novant Health, it is not intended to and does not present the financial position, changes in net assets and cash flows of Novant Health. The purpose of the Schedule is to present a summary of those activities of Novant Health for the year ended December 31, 2024, which have been financed by federal awards. The Uniform Guidance provides for a 10% or 15% de minimis indirect cost rate election, as applicable; however, Novant Health did not make this election and uses a negotiated indirect cost rate when charging indirect costs to federal awards. For purposes of the Schedule, federal awards include all grants, contracts and similar agreements entered into directly between Novant Health and agencies and departments of the federal government and all sub-awards to Novant Health by non-federal organizations pursuant to federal grants, contracts and similar agreements.

Novant Health applied for reimbursement of certain expenses related to the COVID-19 pandemic under Assistance Listing 97.036, FEMA Public Assistance through the State of North Carolina. Expenditures are reflected in the Schedule in the year in which a project application is obligated by FEMA and expenses associated with those funds have been incurred. The Schedule includes $53,995,131 of expenditures incurred in fiscal years 2020 or 2021, for projects which were obligated in fiscal year 2024, and represents a reconciling item between the federal expenses in Novant Health’s financial statements and the amount included on the Schedule. Certain amounts originally obligated by FEMA have been subsequently adjusted; accordingly, the Schedule reflects the net amount of federal expenditures after such adjustments of $1,724,250. A reserve for potentially uncollectible amounts of $2,147,253 was included in the fiscal year 2024 financial statements.