Notes to SEFA
The accompanying schedule of expenditures of federal and state awards (the Schedule) summarizes the federal and state awards expended by Hospital Sisters Health System and Subsidiaries (HSHS) for the year ended June 30, 2025. For purposes of the Schedule, federal and state awards include all grants, contracts, loans, and loan guarantee agreements entered into directly between HSHS and agencies and departments of the federal government and the State of Wisconsin. For the year ended June 30, 2025, HSHS had no expenditures in the form of noncash assistance, and no federally provided insurance in effect. Expenditures for federal and state award programs are recognized on the accrual basis of accounting.
Expenditures consist of direct and indirect costs. Direct costs are those that can be easily identified with an individual federal or state sponsored program. The salary of a social worker or a sponsored program and the materials consumed by the program are examples of direct costs. Unlike direct costs, indirect costs cannot easily be identified with an individual federal or state sponsored program. Indirect costs are the costs of services and resources that benefit many sponsored programs, as well as non-sponsored projects and activities. Indirect costs consist of expenses incurred for such items as administration, plant maintenance, and building and equipment depreciation. programs. The rate is the result of a number of cost allocation procedures that HSHS uses to allocate its indirect costs to both sponsored and non-sponsored activities. The costs allocated to sponsored programs are divided by the direct costs of sponsored programs to arrive at a rate. The U.S. Department of Health and Human Services (DHHS) must approve the rate before HSHS can use it to charge indirect costs to federal or state sponsored programs. HSHS has elected to use de minimis indirect cost rate allowed under Uniform Guidance, except for St. Vincent Hospital, which utilizes a separate negotiated rate. This negotiated rate was used until February 10, 2025 when new guidance was received to reduce to the de minimis rate.
HSHS is responsible only for the performance of certain administrative duties with respect to the Federal Family Education Loan programs, and accordingly, these loans are not included in its consolidated financial statements, and it is not practical to determine the balance of loans outstanding to students and former students of HSHS under these programs at June 30, 2025.
The eligible expenditures reported under Assistance Listing Number 97.036 on the Schedule reflect expenditures incurred in years prior to 2025. The total amount of expenditures related to prior years is $4,513,013.