Iron County Hospital District dba: Iron County Medical CenterLocal Government

2025-002 USDA REQUIREMENTS Federal Agency: U.S. Department of Agriculture Program Title: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the terms and conditions of the agreements with the USDA the Medical Center is required to fund a Replacement and Extension Account. Condition: The Medical Center failed to fund the required reserve accounts for the year ended June 30, 2025. Questioned costs: None Cause: The Medical Center understood that the USDA did not require them to fund the required account under the agreement however no documentation was formalized with the USDA. Effect: The Medical Center is not in compliance with the terms and conditions of the agreement. Recommendation: The Medical Center should work with the USDA to determine what reserve accounts are required, or to the extent they are not required, properly document that understanding in writing with the USDA. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management will continue to work with the USDA to document the requirements around the reserve funding. In addition, subsequent to year-end the Medical Center funded the Replacement and Extension Account as required by the agreement.

2023 – 003 Federal agency: U.S. Department of Health and Human Services Other Programs Federal program title: Provider Relief Funding and American Rescue Plan Rural Payments Assistance Listing Number: 93.498 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: Period 4 Type of Finding: Significant Deficiency in Internal Control Compliance Requirement: Allowable Costs Criteria or specific requirement: Surrounding reporting activities, the Medical Center’s internal controls should be designed to assure all reporting completed under program guidelines. Condition: During our testing, we identified the Hospital did not have internal controls and documentation procedures in place to ensure reporting was completed in accordance with HHS guidelines. Questioned costs: None Context: During our testing, it was identified that the Medical Center used the PRF funds to pay interest on the outstanding USDA loan and other professional insurance, however at the time they did not specifically document how these costs were necessary to respond to Covid-19. Cause: The Hospital was amidst a pandemic and failed to document the rationale at the time of incurring the costs. Effect: The auditor noted no instances of noncompliance with the costs incurred; however, the internal controls around compliance over reporting were not effective. Repeat Finding: N/A Recommendation: We recommend the Medical Center design controls to ensure documentation is completed timely and sufficiently on how costs are necessary to respond to COVID-19. Views of responsible officials: There is no disagreement with the audit finding. Management has identified a sufficient amount of additional COVID-19 related expenses that were not reported to cover the finding amounts.

Federal agency: U.S. Department of Agriculture Federal program title: Community Facilities Loans and Grants CFDA Number: 10.766 Pass-Through Agency: N/A Pass-Through Number(s): N/A Type of Finding: Significant Deficiency in Internal Control in and over Compliance Compliance Requirement: Reporting Criteria or specific requirement: Surrounding reporting activities, the Hospital’s internal controls should be designed to assure all reporting completed under program guidelines. Condition: During our testing, we identified the Hospital did not have internal controls in place to ensure reporting was completed in accordance with USDA guidelines. Questioned costs: None Context: During our testing, it was identified that the Hospital’s audit was not completed and submitted within 9 months of fiscal year end. Cause: The Hospital’s financial statement audit was delayed due to delays in finalizing the fiscal year end 2021 audit. Effect: Financial reporting was not completed timely in accordance with USDA guidelines. Repeat Finding: N/A Recommendation: We recommend the Hospital design controls to ensure that reporting is completing in accordance with latest USDA guidelines. Views of responsible officials: There is no disagreement with the audit finding.