Audit 38547

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. NOTE 1 BASIS OF PRESENTATIONThe accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Community Hospitals of Central California and Affiliated Corporations dba Community Health System (CHS) under programs of the federal government for the year ended August 31, 2022. The information in this Schedule is presented in accordance with the requirements of 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 a selected portion of the operations of CHS, it is not intended to and does not present the financial position, changes in net assets, or cash flows of CHS. In accordance with guidance from the U.S. Department of Health and Human Services (DHHS), CHS included Reporting Period 2 and 3 expenditures for Provider Relief Fund Assistance Listing No. 93.498 of $1,987,906 in the Schedule for the year ended August 31, 2022, to align with DHHS reporting guidelines. In accordance with U.S. GAAP, this total amount was recognized as revenue during the years ended August 31, 2021 and 2020 and is included in beginning net assets as of and for the year ended August 31, 2022.

Title: NOTE 3 INDIRECT COST RATE Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. NOTE 3 INDIRECT COST RATECHS has elected not to use the 10-percent de minimis indirect cost rate as allowed under Uniform Guidance.