Bassett Healthcare NetworkNon-Profit

Federal Agency: United States Department of Health and Human Services (HHS) Federal Program: Nurse Education, Practice Quality and Retention ? Registered Nurses in Primary Care Program (CFDA 93.359) Federal Award Numbers: UK1HP31704 and UK131704 Federal Award Years: 2018, 2019, 2020, 2021 Compliance Requirement: Eligibility Type of Finding: Material Weakness Reference: 2021-001 Criteria Title 42 U.S. Code of Federal Regulations Part 200 (42 CFR 200), Appendix XI Compliance Supplement, Part 3-E specifies the criteria for determining the individuals, groups of individuals (including area of service delivery), or subrecipients that can participate in the program and the amounts for which they qualify. Compliance requirements include maintaining eligibility records, including information about each individual and benefits paid to or on behalf of the individual (regular payments, refunds, and adjustments). Additionally, Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303(a) states the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Bassett Healthcare Network (the Network) did not fully retain eligibility records for students who applied for the program and were granted acceptance to receive cost reimbursements/payments on their behalf for school tuition, supplies, books, etc. Students must be full-time Bassett employees in good standing, with manager support, to be eligible for financial assistance. Managers complete the Manager Support Form to approve eligible students. The program coordinator will keep a copy of the Manager Support Form along with the students? grades which are typically sent by the students via email to the program coordinator. Six tuition payments from throughout the year were selected for testing, which consisted of at least 51 individuals who had expenses paid on their behalf. In connection with our procedures, we identified that the Manager Support Form was not retained or available for all individuals selected for testing. In addition, students must maintain a grade of C or higher each semester to remain eligible for the program. The support showing grades for these 51 individuals was either not received or retained and, therefore, eligibility could not be adequately supported. Cause The condition found is due to turnover at the Network and issues with past staff not retaining the eligibility support in an accessible way for succeeding staff to obtain. Possible Asserted Effect Failure to appropriately identify eligible program participants, resulting in ineligible payments using federal funds. Questioned Costs $261,253 (total of the six tuition payments tested) Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This finding is similar to finding 2020-001 in the previous audit. Recommendation We recommend the Network continue to use the Management Support Forms and obtain student grades. However, the Network should implement a formal policy to outline the supervisory review of these forms and indicate who is eligible to receive program benefits. The policy should include details on retention of the approved forms to ensure they are accessible to appropriate staff and position levels in event of staff changes or audit. Views of Responsible Officials Recommendation accepted. Corrective action in progress. Reference the corrective action plan for further details.

Federal Agency: United States Department of Health and Human Services (HHS) Federal Program: Nurse Education, Practice Quality and Retention ? Registered Nurses in Primary Care Program (CFDA 93.359) Federal Award Numbers: UK1HP31704 and UK131704 Federal Award Years: 2018, 2019, 2020, 2021 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency Reference: 2021-002 Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200.214) specifies the Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Additionally, Title 2 U.S. Code of Federal Regulations Part 180 (2 CFR 180.300), when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303(a) also states the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Bassett Healthcare Network (the Network) failed to ensure contracted entities were not disbarred or suspended during the year under audit. Cause The condition found is due to turnover at the Network and staff not appropriately following the Network?s Contract Review Policy that explicitly states each contract will be overseen by the Vice President (VP) of the division/department in which that contract was initiated and the VP will ensure that the vendor/contractor is not listed on any disbarred contractors list or involved in any litigation that may impede their ability to fulfill contractual obligations with the Network and are in compliance with federal and state rules and regulations. Possible Asserted Effect Failure to appropriately identify entities that are disbarred or suspended could result in non-allowable transactions. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Not a finding in the previous audit. Recommendation We recommend the Network enhance the precision level and documentation of its internal controls related to their review of entities being contracted with ensuring they are appropriately not suspended nor debarred. Views of Responsible Officials Recommendation accepted. Corrective action in progress. Reference the corrective action plan for further details.

Federal Agency: United States Department of Health and Human Services (HHS) Federal Program: Nurse Education, Practice Quality and Retention ? Registered Nurses in Primary Care Program (CFDA 93.359) Federal Award Numbers: UK1HP31704 and UK131704 Federal Award Years: 2018, 2019, 2020, 2021 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency Reference: 2021-003 Criteria Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303(a) states the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Bassett Healthcare Network (the Network) failed to properly document internal controls to ensure program expenditures were spent within the appropriate period of performance. Cause The condition found is due to delayed timing in performing the cumulative grant reconciliation. In June 2022, management performed a cumulative reconciliation of grant program expenditures for the grant period July 1, 2020 through June 30, 2021. This reconciliation identified errors in the supporting general ledger detail that required adjustment. The adjusted amounts required the Network to seek approval from HRSA to recognize a carryover of $55,370.45 for the grant period, which was ultimately approved. However, the transactional detail that supported the corrected amounts was corrupted and was not able to be provided to support whether the control over period of performance effectively operated at an individual transaction level during the period under audit. Possible Asserted Effect Failure to appropriately document controls and execute such controls on a timely basis performed ensuring expenditures were spent in the period of performance. This can lead to expenditures charged to the grant that should not be and go undetected. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Not a finding in the previous audit. Recommendation With respect to period of performance, we recommend the Network document program expenditures and reconcile to the general ledger regularly and timely. We also recommend the Network consistently implement timely supervisory review of expenditure reconciliations and retain those records. Views of Responsible Officials Recommendation accepted. Corrective action in progress. Reference the corrective action plan for further details.

Criteria Title 42 U.S. Code of Federal Regulations Part 200 (42 CFR 200), Appendix XI Compliance Supplement, Part 3-E specifies the criteria for determining the individuals, groups of individuals (including area of service delivery), or subrecipients that can participate in the program and the amounts for which they qualify. Compliance requirements include maintaining eligibility records, including information about each individual and benefits paid to or on behalf of the individual (regular payments, refunds, and adjustments). Additionally, Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303(a) states the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Bassett Healthcare Network (the Network) did not fully retain eligibility records for students who applied for the program and were granted acceptance to receive cost reimbursements/payments on their behalf for school tuition, supplies, books, etc. Students must be full time Network employees in good standing, with manager support, to be eligible for financial assistance. Managers complete the Manager Support Form to approve eligible students. The program coordinator will keep a copy of the Manager Support Form along with the students? grades which are typically sent by the students via email to the program coordinator. Four tuition payments from throughout the year were selected for testing, which consisted of 34 individuals who had expenses paid on their behalf. There are 48 students that participate in this program. In connection with our procedures, we identified that the Manager Support Form was not retained or available for 12 of 34 individuals elected for testing. In addition, students must maintain a grade of C or higher each semester to remain eligible for the program. We observed that the support showing grades for these 34 individuals was either not received or retained and, therefore, eligibility could not be adequately supported. Cause The condition found is due to turnover at the Network and issues with past staff not formally retaining the eligibility support in an accessible way for succeeding staff to obtain and use. Management has indicated that the individuals receiving the financial assistance were employees of the Network and it is unlikely that they were not in good standing with the Network or their attending schools during 2020, given their continued employment. Possible Asserted Effect Failure to appropriately identify if program participants are eligible, resulting in potentially ineligible payments using federal funds. Questioned Costs $53,624 (total of the four tuition payments tested) Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding There was no similar finding in previous audits. Recommendation We recommend the Network continue to use the Management Support Forms and to obtain student grades. However, the Network should implement a formal policy to outline the supervisory review of these forms and indicate who is eligible to receive program benefits. The policy should include details on retention of the approved forms to ensure they are accessible to appropriate staff and position levels in event of staff changes or audit. Views of Responsible Officials We agree with the finding and observations and specifically note the following corrective actions will be implemented: ? Specified procedures will be documented and implemented with respect to timely preparation and review of the Manager Support Form to demonstrate employee initial and continuing eligibility, and such files will be retained for at least five years. ? Training sessions for personnel assigned to manage the program and retain the records and succession.