UMass Memorial Health Care, Inc.Non-Profit

Finding No. 2024-001 – Procurement Award Information Cluster: Not applicable Grantor: Department of Health and Human Services (DHHS) Award Name: Community Project Funding/Congressionally Directed Spending - Construction Award Number: 6 CE1HS52894‐01‐04, 6 CE1HS52345‐01‐05 Award Year: FY2024 Assistance Listing Number: 93.493 Assistance Listing Title: Congressional Directives Pass-through Entity: Not applicable Criteria In accordance with 2 CFR 200.318 the entity must maintain procurement records of sufficient detail that include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Condition In our testing, 2 of 2 samples totaling $1,874,650 were in excess of the System’s simplified acquisition threshold of $250,000. These 2 selections funded separate capital expenditures, both of which were initially funded by nonfederal dollars. Subsequently, federal earmarks were received to partially fund these projects. As such, the System did not have support that would be required for a federal purchase. More specifically, the System did not maintain support for the procurement method selected, contract type selection, contractor selection or rejection, and the basis for the contract price in accordance with 2 CFR 200.318. In addition, the 2 selections also did not have evidence maintained of an independent cost or price analysis in accordance with CFR 200.324 (a). Cause In both circumstances, partial funding was requested to supplement larger purchases for which it was not anticipated that federal funding would be used; as such, compliance with federal funding requirements was not contemplated and thus typical support that would be required for a federal purchase was not followed. Effect The System could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transaction could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the System update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the System’s relevant procurement thresholds is maintained consistently in the procurement files. Documentation should clearly outline the rationale for contractor selection and the System’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s views and corrective action plan is included at the end of this report.

2023-001 Provider Relief Fund Lost Revenue Reporting Cluster: Not applicable Grantor: Health Resources and Services Administration Award Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: PRF Period 4 of Availability from January 1, 2020 to December 31, 2022 Award Number: Not applicable Assistance Listing Number: 93.498 Criteria Step 8 of the Steps on Reporting on Use of Funds section of the April 22, 2024 Provider Relief Fund (PRF) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues, calculated as the difference between actual patient care revenues, to submit revenues from patient care in the PRF Reporting Portal by quarter from January 1, 2019 to December 31, 2022, the end of the Period 4 period of availability. Condition UMass Memorial Health – Harrington, Inc. and Affiliates (Harrington), a wholly controlled subsidiary of the System, understated patient care revenues reported in the PRF Reporting Portal for the third and fourth quarters of calendar year 2021 by approximately $6.2 million. Specifically, Harrington Hospital, Inc. (HMH) and Harrington Physician Services (HPS) reported incorrect values for patient care revenues in these quarters resulting in an understatement of patient care revenues in the PRF Reporting Portal by approximately $5.7 million and $0.5 million, respectively. This is a recurring finding that was identified as part of the Harrington program-specific standalone audit for the year ended September 30, 2022. Cause Harrington did not have an effective control in place to ensure a sufficient review was performed over the accuracy of revenues from patient care used as inputs to the lost revenue calculation prior to completing the PRF Period 4 Reporting Portal submissions. Effect While revenues from patient care were inaccurately reported in the PRF Period 4 Reporting Portal Submission, Harrington had sufficient lost revenues and unreimbursed COVID-19-related expenses to support the amount of Period 4 PRF funding received. Questioned Costs None identified. Recommendation We recommend that management ensure there is an effective control in place whereby a detailed review is performed and evidenced of the lost revenue calculation detail prior to PRF Reporting Portal submissions. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

2019-001: Suspension and Debarment Federal Agency: All Federal Awards Program Name: All Federal Awards CFDA Number: All Federal Awards Award Year: All Federal Awards Award Number: All Federal Awards Criteria Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. In order to comply with federal requirements, the System has policies and procedures in place such that they verify both new and existing vendors are not listed in the SAM database as being suspended or debarred. For new vendors, the System requires the purchasing department ensure new vendors are not suspended or debarred prior to being entered into the payment processing system. Additionally, the System requires procurement to check all existing vendors against the SAM database on a monthly basis. Further, per 2 CFR section 200.112, the non-Federal entity must disclose in writing any potential conflict of interest to the Federal awarding agency or pass-through entity in accordance with applicable Federal awarding agency policy. Thus, the System has a policy in place whereby the Compliance Office obtains annual conflict of interest acknowledgments from all management-level staff disclosing any such relationships. Condition We selected 3 out of 12 months for testing suspension and debarment and requested evidence of the System?s monthly review of the SAM database for existing vendors. Through our testing, management was unable to provide support evidencing that the monthly existing vendor check against the SAM database was performed for all 3 months selected. In addition, through our testing of the Conflict of Interest Policy, we noted 2 selections of management-level staff out of the 15 sampled did not submit the Conflict of Interest acknowledgment for fiscal year 2019. Cause Procurement staff did not adequately maintain records of existing vendor verifications performed throughout the year as a result of turnover and not understanding the level of support that needed to be maintained. Additionally, Compliance staff did not verify the completeness of the Conflict of Interest responses for the year and thus certain management-level staff who should have returned their Conflict of Interest form were missed and not followed-up on by management. Effect The System may enter into a covered transaction with an entity that is suspended, debarred, or have a conflicting interest that is not adequately disclosed. Questioned Costs None noted. Recommendation We recommend the System implement a formal recordkeeping protocol to appropriately evidence all suspension and debarment procedures performed during the year. Additionally, to aid in appropriate conflict of interest policy compliance we recommend the System educate the Compliance office on the formal policies in place to ensure completeness of the control performed and to implement procedures to follow-up with employees who do not submit their responses timely. Management?s Views and Corrective Action Plan Management?s Views and Corrective Action Plan is included at the end of this report after the Summary Schedule of Prior Audit Findings and Status.

2019-002: Eligibility Federal Agency: U.S. Department of Housing and Urban Development Program Name: Housing Opportunities for Persons with AIDS Program (HOPWA) CFDA Number: 14.241 Award Year: 10/19/2018-10/18/2021 Award Number: MA - H180005 Criteria The HOPWA program has several specific eligibility requirements as defined in 24 CFR 574.3, including one whereby a person eligible for assistance under this housing program has HIV or AIDS and is low-income (as is the person?s family, including persons important to their care or well-being). The eligibility of tenants who are admitted to the program is determined by (1) obtaining applications that contain all the information needed to determine eligibility, including diagnosis, documentation of housing need, income, rent and order of selection; and (2) obtaining third-party verifications or documentation of expected income, assets, unusual medical expenses, and any other pertinent information. Additionally, for contract #MA-H18005, the System agreed to update client eligibility records no less than annually. Condition We selected 4 participants of the HOPWA program out of a population of 14 and noted 1 instance whereby the System did not maintain an appropriate record of the annual income verification and 1 instance in which the System did not maintain signed records of the initial confirmation of participant eligibility. Cause System staff work very closely with the individuals in this program and as such overlooked the requirement to maintain adequate supporting documentation in the client file. Effect The System may provide services to participants who are not eligible for assistance. Questioned Costs None noted. Recommendation We recommend the System educate their program staff on the formal policies in place to maintain eligibility records to ensure required verifications are performed and recorded for the year. Management?s Views and Corrective Action Plan Management?s Views and Corrective Action Plan is included at the end of this report after the Summary Schedule of Prior Audit Findings.

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