Audit 370125

Finding 2023-001 – Reporting Federal Program: Provider Relief Fund and American Rescue Plan Rural Distribution ALN: 93.498 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2023 to September 30, 2023 and January 1, 2024 to March 31, 2024. Criteria: 45 CFR section 75.303 (a) states non-federal entities must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 45 CFR section 75.303 (b) states non-federal entities must: Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. Recipients of provider relief funds must support all expenses with adequate documentation and maintain proper control documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus. Condition Found, Including Perspective: There is not sufficient documentation to evidence management’s review of the HRSA portal submission prior to submission to the U.S. Department of Health and Human Services. Possible Cause and Effect: While Grady Memorial Hospital Corporation maintains that appropriate management review did take place prior to the portal submission, controls were not designed or implemented effectively to maintain evidence of management’s review. Formal documentation of the review occurred subsequent to the HRSA portal submission. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: Yes: Finding 2022-002 – Reporting Recommendation We recommend that management implement appropriate controls and processes to review the grant reports prior to submission and to provide evidence of the related review. Views of Responsible Officials: Grady Memorial Hospital Corporation has implemented controls and processes to ensure grant reports are reviewed prior to submission and that evidence of review is maintained.

Finding 2023-002 – SEFA Reporting Federal Program: Medicaid Assistance Program HIV Emergency Relief Project Grants ALNs: 93.778 93.914 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2022 – June 30, 2024 (93.778) March 1, 2022 – February 28, 2024 (93.914) Criteria: 2 CFR, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, §200.510(b) requires that auditees prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained certain differences between federal expenditures reported and the years in which the federal awards were expended totaling $174,977 related to the Medicaid Assistance Program and $250,808 relate to the HIV Emergency Relief Project Grants. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to ensure that certain amounts were properly reflected on the SEFA in the period in which they were expended. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: Yes – 2022-001 Recommendation We recommend that management implement appropriate controls and processes to ensure that expenditures are presented on the correct SEFA year. Views of Responsible Officials: Grady Memorial Hospital Corporation will implement a control and process to ensure that expenditures are properly reflected on the SEFA.

Finding 2023-003 – SEFA Reporting Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Disaster Grants – Public Assistance ALNs: 21.027 97.036 Federal Agency: U.S. Department of Treasury U.S. Department of Homeland Security Federal Award Years: October 1, 2022 – September 20, 2024 (21.027) January 1, 2023 – December 31, 2023 (97.036) Criteria: 2 CFR, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, §200.510(b) requires that auditees prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition Found, Including Perspective: The System did not have adequate controls relating to the reporting of expenditures on the SEFA for the FEMA – Disaster Grants – Public Assistance and the Coronavirus State and Local Fiscal Recovery Funds programs. Specifically, the System did not have a control in place to ensure that all FEMA awards obligated during the year were recorded on the SEFA. Additionally, the System did not have a control in place to ensure that all incurred expenditures were properly accrued on the SEFA. As a result, the expenditures on the SEFA were understated as follows: • Expenditures of $2,038,362 for the FEMA – Disaster Grants – Public Assistance program were obligated and incurred as of December 31, 2023 but not recorded on the SEFA. • Expenditures of $2,790,267 for the Coronavirus State and Local Fiscal Recovery Funds program were incurred but not accrued for at year end. • Expenditures of $7,529,167 for the Coronavirus State and Local Fiscal Recovery Funds program which were incurred during 2023 and subsequently identified by management to be submitted for reimbursement under the federal award. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to ensure that amounts were properly recognized on the SEFA in the period in which they were expended. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the System from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is not a repeat finding. Recommendation We recommend that management implement appropriate controls and processes to ensure that the SEFA is complete and accurate. Views of Responsible Officials: Grady Memorial Hospital Corporation will implement a control and process to ensure that expenditures are properly reflected on the SEFA.