Audit 51461

Federal Grantor: US Department of Homeland Security Federal Emergency Management Agency (FEMA) Assistance Listing No.: 97.036 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?The non-Federal entity must: (a) 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).? The Uniform Guidance 2 CFR section 200.329 states, ?(b) The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information. As appropriate and in accordance with above mentioned information collections, the Federal awarding agency must require the recipient to relate financial data and accomplishments to performance goals and objectives of the Federal award. Also, in accordance with the above mentioned common information collections, and when required by the terms and conditions of the Federal award, recipients must provide cost information to demonstrate cost effective practices (e.g. through unit cost data). In some instances (e.g., discretionary research awards), this will be limited to the requirement to submit technical performance reports (to be evaluated in accordance with Federal awarding agency policy).? Reporting requirements must be clearly articulated such that, where appropriate, performance during the execution of the Federal award has a standard against which non-Federal entity performance can be measured. Condition: Baptist Health Care Corporation and Subsidiaries (the Company) received funding under program 97.036 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (Program) during the fiscal year ended September 30, 2022. Under the conditions of the grant, the Company is required to submit quarterly progress reports on all open large projects 30 days after the end of each calendar quarter as well as an annual report SF-425, Federal Financial Report. Based on discussions with management, we understand that the Company?s report submissions were outsourced to a contracted third party on the Company?s behalf. However, management did not establish internal controls over compliance to validate the reporting was complete and accurate prior to submission. As such, we consider the lack of design of controls to validate completeness and accuracy of reporting for this program to represent a material weakness in internal control over compliance. Cause The Company?s internal controls in place over the review of the completeness and accuracy of reporting under the Program were not sufficient to review and supervise the work performed by third party contractors. Effect or potential effect The lack of management review of the reports to be submitted by the contracted third party regarding this Program could have resulted in inaccurate reporting to the granting agency. Questioned costs None. Context: See above. Identification as a repeat finding, if applicable Not applicable. Recommendation The Company should implement controls to review the completeness and accuracy of required reports to be submitted by the third-party prior to the submission of quarterly reporting. In addition, the Company should communicate to the third party that the reporting should be explicitly authorized by an appropriate individual in the Company?s management prior to submission. Views of responsible officials: The Company agrees with the comment and will prospectively correct the finding regarding the major program through reviewing the completeness and accuracy of reporting prior to submission. See separate Corrective Action Plan.

Federal Grantor: US Department of Homeland Security Federal Emergency Management Agency (FEMA) Assistance Listing No.: 97.036 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?The non-Federal entity must: (a) 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).? The Uniform Guidance 2 CFR section 200.329 states, ?(b) The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information. As appropriate and in accordance with above mentioned information collections, the Federal awarding agency must require the recipient to relate financial data and accomplishments to performance goals and objectives of the Federal award. Also, in accordance with the above mentioned common information collections, and when required by the terms and conditions of the Federal award, recipients must provide cost information to demonstrate cost effective practices (e.g. through unit cost data). In some instances (e.g., discretionary research awards), this will be limited to the requirement to submit technical performance reports (to be evaluated in accordance with Federal awarding agency policy).? Reporting requirements must be clearly articulated such that, where appropriate, performance during the execution of the Federal award has a standard against which non-Federal entity performance can be measured. Condition: Baptist Health Care Corporation and Subsidiaries (the Company) received funding under program 97.036 - Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (Program) during the fiscal year ended September 30, 2022. Under the conditions of the grant, the Company is required to submit quarterly progress reports on all open large projects 30 days after the end of each calendar quarter as well as an annual report SF-425, Federal Financial Report. Based on discussions with management, we understand that the Company?s report submissions were outsourced to a contracted third party on the Company?s behalf. However, management did not establish internal controls over compliance to validate the reporting was complete and accurate prior to submission. As such, we consider the lack of design of controls to validate completeness and accuracy of reporting for this program to represent a material weakness in internal control over compliance. Cause The Company?s internal controls in place over the review of the completeness and accuracy of reporting under the Program were not sufficient to review and supervise the work performed by third party contractors. Effect or potential effect The lack of management review of the reports to be submitted by the contracted third party regarding this Program could have resulted in inaccurate reporting to the granting agency. Questioned costs None. Context: See above. Identification as a repeat finding, if applicable Not applicable. Recommendation The Company should implement controls to review the completeness and accuracy of required reports to be submitted by the third-party prior to the submission of quarterly reporting. In addition, the Company should communicate to the third party that the reporting should be explicitly authorized by an appropriate individual in the Company?s management prior to submission. Views of responsible officials: The Company agrees with the comment and will prospectively correct the finding regarding the major program through reviewing the completeness and accuracy of reporting prior to submission. See separate Corrective Action Plan.