Monument Health, Inc.Non-Profit

Department of Homeland Security Federal Financial Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance and Noncompliance 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: Our testing identified eleven instances where contract labor costs were over claimed under the program due to a calculation error. Monument Health’s methodology for identifying contract labor attributable to COVID to be based upon identifying total contact labor and multiplying by the percentage of COVID patient days as a percentage of total patient days. The methodology also identified certain cost centers were to be excluded from the calculation, including behavioral health and med/surg nursing. Based upon review of management’s allocation percentage, it was noted the behavioral health and med/surg nursing COVID patient days were included within the total COVID patient days; therefore, a higher percentage of COVID patient days to total patient days was calculated. The calculation percentage was then utilized to calculate contract labor attributable to COVID for contract labor costs identified from July 2, 2022 through May 11, 2023. Cause: The review process did not identify the behavioral health and med/surg nursing COVID patient days being improperly included within the calculation of contract labor attributable to COVID. Effect: Monument Health’s control did not detect or correct the calculation error identified, which resulted in expenditures being claimed under the federal program that may be unallowable and a reasonable possibility that Monument Health would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: There are questioned costs in the amount of $58,985. Context: A non‐statistical sample of 60 out of 2,565 total transactions were selected for testing, which accounted for $178,483 of $10,295,993 of federal program expenditures. In addition, five individually significant items were selected for testing which accounted for $1,066,229 of federal program expenditures. Testing was also performed over the calculation of contract labor attributable to COVID patient days as a percentage of total patient days for the period from July 1, 2021 to July 1, 2022 and from July 2, 2022 to May 11, 2023. Repeat Finding from Prior Year: No Recommendation: We recommend Monument Health review and strengthen the controls surrounding the calculations of expenditures being claimed under the grant. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN#460360899 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting 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: Our testing identified four months of other general and administrative expenses claimed under the federal program did not consider the credit to be received back from a third-party vendor for service time not performed by the third party vendor. Cause: Monument Health prepaid a third-party vendor for services to be performed and at the end of the service period, Monument Health did not consider the refunds to be received back from a third-party vendor when claiming expenses under the federal program. Effect: The secondary review and approval over final expenditures claimed under the federal program did not identify this matter and therefore, expenses were overclaimed under the federal program and included within the special report submitted to the federal agency. Questioned Costs: The Period 4 report incorrectly included $64,404 of other general and administrative expenses. However, the Period 4 report also included approximately $6,077,500 of unused lost revenue. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Context: A non-statistical sample of 19 ($228,440) out of a population of 92 transactions relating to general and administrative and healthcare related expenses ($263,750), including mortgage/rent, supplies, purchased services, information technology, and facilities were tested. Summary level testing was also performed as it relates to incremental increased personnel costs relating to nursing contract labor and special incentives provided to employees. Repeat Finding from Prior Year: No Recommendation: We recommend management review the third party vendor invoices and reduce unused lost revenue in any future federal reports. Views of Responsible Officials: Management agrees with the finding.

2022-001 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN#460319070, and TIN#460360899 Federal Financial Assistance Listing #93.461 COVID-19 HRSA Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund Preparation of the Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the consolidated schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: Management prepared the schedule for the year ended June 30, 2022. During testing, the auditors decreased the amount reported for the COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF) to the amounts reported within the Department of Health and Human Services (HHS) for Period 2 and Period 3 Special Report. In addition, adjustments were made to decrease the amount reported for the COVID-19 HRSA Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund (Uninsured Program) to total receipt of monies received from the federal agency during the year ended June 30, 2022. Cause: The amount reported for PRF included the amount of funds received during Period 4. In addition, the Uninsured program improperly included monies from the federal agency with deposit dates during June 2021 and improperly excluded monies from the federal agency with deposit dates during June 2022. Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when Monument Health meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that Monument Health would not be able to draft a complete and accurate schedule without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management review the unique requirements of the PRF program relating to when the expenditures are required to reported on the schedule. In addition, we recommend reviewing grant expenditures near year end to ensure proper cut-off relating to claims paid under the Uninsured Program. Views of Responsible Officials: Management agrees with the finding.

2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.461 COVID-19 HRSA Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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: Our testing identified one instance in which health services provided to a patient were reimbursed under the federal program, and the health services provided did not meet the terms and conditions of the federal program. Cause: Through the coding process, an incorrect Dx Code was included in the system, and therefore, the patient?s health services flowed into Monument Health?s Uninsured Program workflow which resulted in $3,563 of health services being reimbursed under the federal program. Effect: Funds were received under the federal program for health services provided which did not meet the terms and conditions of the federal program. Questioned Costs: None reported. Context: A non-statistical sample of 60 patients were selected for testing, which accounted for $1,659,497 of $4,344,728 of monies received from the federal agency. Repeat Finding from Prior Years: No Recommendation: We recommend management review health services provided to patients to ensure the health services provided are allowable to be reimbursed under the terms and conditions of the federal program. Views of Responsible Officials: Management agrees with the finding.

2021-001 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #201487506, TIN#460319070, and TIN#460360899 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting 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: In one instance, fringe benefit expense claimed under the program did not agree to supporting documentation. Monument Health also claimed incremental increased personnel costs relating to nursing contract labor. Monument Health calculated a nursing contract labor baseline based upon the average cost of nursing contract labor from July 2019 through February 2020, costs prior to the start of the pandemic. In review of Monument Health?s calculation, Monument Health only claimed these incremental costs during the months where nursing contract labor was in excess of the calculated baseline rather than the overall net increase. There were five months where nursing contract labor costs were below the calculated baseline which were not considered when claiming the incremental increased personnel costs under the program. Cause: The fringe benefit expense claimed under the program did not agree to supporting documentation and management did not consider netting of the incremental increased personnel costs relating to nursing contract labor. Effect: The secondary review and approval over final expenditures claimed under the program did not identify these matters. Questioned Costs: The Period 1 report included $31,971 of fringe benefits and $1,952,142 of incremental increased personnel costs were incorrectly included on Monument Health?s filing. However, the Period 1 report also included approximately $4,591,000 of additional unreimbursed general and administrative expenses relating to 2021 quarter 2 that more than offset the fringe benefit and personnel costs referred to above. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Context/Sampling: A nonstatistical sample of 60 ($2,668,031) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including mortgage/rent, personnel, fringe benefits, lease payments, utilities, supplies, equipment, information technology, and facilities ($18,723,118) were tested. Summary level testing was also performed as it relates to the incremental increased personnel costs relating to nursing contract labor, cost of non-furloughs to maintain capacity and special incentives provided to employees. Repeat Finding from Prior Years: No Recommendation: We recommend Monument Health review the incremental increased personnel costs relating to nursing contract labor calculation and employee fringe benefits and reduce the unreimbursed expenses in future reports. Views of Responsible Officials: Management agrees with the finding.