Audit 857

2022‐003 U.S Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 – TIN #410711612 Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance ‐ Other Criteria – Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires PioneerCare to prepare a consolidated schedule of expenditures of federal awards (Schedule). 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – PioneerCare does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause – Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when PioneerCare meets a specified threshold of federal expenditures. Accordingly, management has made the determination to have the auditor assist with the preparation of the Schedule. Effect – There is a reasonable possibility PioneerCare would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs – None reported. Context – Sampling was not used. Repeat Finding from Prior Year ‐ Yes Recommendation ‐ While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the reporting requirements relating to PioneerCare’s consolidated schedule of expenditures of federal awards and internal controls that impact reporting. Views of Responsible Officials ‐ Management agrees with the finding.

2022‐003 U.S Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 – TIN #410711612 Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance ‐ Other Criteria – Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires PioneerCare to prepare a consolidated schedule of expenditures of federal awards (Schedule). 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – PioneerCare does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause – Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when PioneerCare meets a specified threshold of federal expenditures. Accordingly, management has made the determination to have the auditor assist with the preparation of the Schedule. Effect – There is a reasonable possibility PioneerCare would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs – None reported. Context – Sampling was not used. Repeat Finding from Prior Year ‐ Yes Recommendation ‐ While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the reporting requirements relating to PioneerCare’s consolidated schedule of expenditures of federal awards and internal controls that impact reporting. Views of Responsible Officials ‐ Management agrees with the finding.

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – During our testing, there was no formal documented review over the reserve fund reconciliation for the federal program. Cause – PioneerCare did not have an adequate internal control policy in place to ensure review and approval over the reserve fund was maintained. Effect – The lack of adequate policies governing the review and approval of the reserve fund increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context – Sampling was not used. PioneerCare has two reserve accounts that were tested. Repeat Finding from Prior Year – No Recommendation – We recommend PioneerCare enhance internal control policies to ensure that formal documentation of reviews are present. Views of Responsible Officials ‐ Management agrees with the finding.

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – During our testing, there were two debt covenants, net worth and the amount of capital expenditures, that were not included in the monthly covenant report included in the financial packet for monitoring. Cause – PioneerCare does not have an adequate internal control policy in place to ensure monitoring of all required debt covenants. In addition, there was no control in place to seek approval prior to reaching the capital expenditure threshold of $100,000. Effect – The lack of adequate monitoring of the debt covenants increases the risk that PioneerCare could be out of compliance with the related financial debt covenants. Questioned Costs – None reported. Context – Sampling was not used. PioneerCare has four financial debt covenants that were tested. Repeat Finding from Prior Year – No Recommendation – We recommend PioneerCare enhance their monitoring of the financial debt covenants and include the net worth and amount of capital expenditures in their monthly financial package to ensure these are reviewed by management. We also recommend PioneerCare implement controls to obtain approval prior to reaching the capital expenditure threshold of $100,000. Views of Responsible Officials ‐ Management agrees with the finding.

2022‐003 U.S Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 – TIN #410711612 Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance ‐ Other Criteria – Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires PioneerCare to prepare a consolidated schedule of expenditures of federal awards (Schedule). 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – PioneerCare does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause – Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when PioneerCare meets a specified threshold of federal expenditures. Accordingly, management has made the determination to have the auditor assist with the preparation of the Schedule. Effect – There is a reasonable possibility PioneerCare would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs – None reported. Context – Sampling was not used. Repeat Finding from Prior Year ‐ Yes Recommendation ‐ While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the reporting requirements relating to PioneerCare’s consolidated schedule of expenditures of federal awards and internal controls that impact reporting. Views of Responsible Officials ‐ Management agrees with the finding.

2022‐003 U.S Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 – TIN #410711612 Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance ‐ Other Criteria – Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires PioneerCare to prepare a consolidated schedule of expenditures of federal awards (Schedule). 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – PioneerCare does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause – Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when PioneerCare meets a specified threshold of federal expenditures. Accordingly, management has made the determination to have the auditor assist with the preparation of the Schedule. Effect – There is a reasonable possibility PioneerCare would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs – None reported. Context – Sampling was not used. Repeat Finding from Prior Year ‐ Yes Recommendation ‐ While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the reporting requirements relating to PioneerCare’s consolidated schedule of expenditures of federal awards and internal controls that impact reporting. Views of Responsible Officials ‐ Management agrees with the finding.

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – During our testing, there was no formal documented review over the reserve fund reconciliation for the federal program. Cause – PioneerCare did not have an adequate internal control policy in place to ensure review and approval over the reserve fund was maintained. Effect – The lack of adequate policies governing the review and approval of the reserve fund increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context – Sampling was not used. PioneerCare has two reserve accounts that were tested. Repeat Finding from Prior Year – No Recommendation – We recommend PioneerCare enhance internal control policies to ensure that formal documentation of reviews are present. Views of Responsible Officials ‐ Management agrees with the finding.

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition – During our testing, there were two debt covenants, net worth and the amount of capital expenditures, that were not included in the monthly covenant report included in the financial packet for monitoring. Cause – PioneerCare does not have an adequate internal control policy in place to ensure monitoring of all required debt covenants. In addition, there was no control in place to seek approval prior to reaching the capital expenditure threshold of $100,000. Effect – The lack of adequate monitoring of the debt covenants increases the risk that PioneerCare could be out of compliance with the related financial debt covenants. Questioned Costs – None reported. Context – Sampling was not used. PioneerCare has four financial debt covenants that were tested. Repeat Finding from Prior Year – No Recommendation – We recommend PioneerCare enhance their monitoring of the financial debt covenants and include the net worth and amount of capital expenditures in their monthly financial package to ensure these are reviewed by management. We also recommend PioneerCare implement controls to obtain approval prior to reaching the capital expenditure threshold of $100,000. Views of Responsible Officials ‐ Management agrees with the finding.