Management?s Views and Corrective Action Plan 2022-001: Schedule of Expenditures of Federal Awards All Federal programs Federal Award year: 2021 Management?s Response Management agrees with the finding as it relates to the inclusive of expenditures of State awards. As part of the preparation and review of the schedule of expenditures of federal awards (the ?Schedule?), processes were in place to reconcile total expenditures under the program to the general ledger as well as the consolidated financial statements. In addition, analytical review was performed of variances in expenditures year-over-year, by program, to assess reasonableness of reported expenditures. During review of the 2021 CHIP program expenditures, management reconciled total expenditures to the general ledger and consolidated financial statements without exception, as both the general ledger and consolidated financial statements include total program expenditures (i.e., both federal and state are included). In addition, upon review of variances in total program expenditures in comparison to the previous award year, variances appeared reasonable as they remained relatively consistent year-over-year and with historical data. In fiscal year 2022, management has implemented additional steps into its reconciliation process to bifurcate the total expenditures between Federal and State expenditures prior to agreement to the general ledger and consolidated financial statements to ensure exclusion of State amounts when preparing the Schedule. In addition, within the analytical review process management utilizes the bifurcated totals to assess for reasonableness at the more detailed level regarding year-over-year variances. Anticipated Completion Date Additional reconciliation steps and bifurcation of amounts were implemented during the preparation and review of the 2022 Schedule. Responsible Parties ? Matthew Bazzani, Chief Accounting Officer, Highmark Health