QUARRYVILLE PRESBYTERIAN RETIREMENT COMMUNITY

Finding 2021-001: Lost Revenue Reporting Assistance Listing No.: 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not Applicable Award Number / Year: Not Applicable / 2020 Criteria: All recipients of Provider Relief Fund (PRF) payments must comply with the Revenue Reporting Guide and the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (collectively, the Guidance). PRF payment amounts not fully expended on health care-related expenses attributable to coronavirus may be applied to patient care lost revenues, if applicable. Recipients may choose to apply PRF payments toward lost revenues using one of three options: Option i: the difference between actual patient care revenues for each calendar quarter in 2019 versus 2020, and 2019 versus 2021. Option ii: the difference between budgeted and actual patient care revenues for each calendar quarter in 2020 and 2021, as long as the budgets utilized for this option were approved prior to March 27, 2020. Option iii: calculated by any reasonable method of estimating revenues. Condition/Context: The Organization did not correctly apply the Guidance to calculate lost revenues. The Organization selected reporting option i and erroneously excluded revenues attributable to residential living, home care, and other resident care related services provided to residents from the 2019, 2020 and 2021 revenue amounts entered into the Health Resources and Services Administration (HRSA) PRF Reporting Portal. The adjustments needed within the HRSA PRF Reporting Portal to correct the exclusion of these revenues would decrease the amount eligible for lost revenue reimbursement from $2,610,389 to $1,538,677 on total PRF distributions of $821,833. Effect: The amounts reported to the HRSA were not in accordance with the Guidance. Questioned Costs: None reported. Cause: Management incorrectly interpreted the Guidance. Recommendation: We recommend that management review their processes and procedures to ensure that lost revenues are calculated in accordance with the Guidance. Views of Responsible Officials: Management intended to select option iii as a result of excluding revenues that were generally not negatively impacted by the COVID-19 pandemic (residential living, home care, and other resident care related service revenues). Management will select option iii on future HRSA PRF Reporting Portal submissions.

CORRECTIVE ACTION PLAN September 20, 2022 U.S. Department of Health and Human Services Quarryville Presbyterian Retirement Community respectfully submits the following corrective action plan for the year ended June 30, 2021. Name and address of independent public accounting firm: Baker Tilly U.S., LLP 1570 Fruitville Pike, Lancaster, PA 17601 Audit period: Year Ending June 30, 2021 The finding from the June 30, 2021 schedule of findings and questioned costs are discussed below. The finding is numbered consistently with the number assigned in the schedule. FEDERAL AWARD FINDINGS U.S. Department of Health and Human Services CFDA Number 93.498 Finding 2021-001 Recommendation: We recommend that management review their processes and procedures to ensure that lost revenues are calculated in accordance with the Guidance. Action Taken: Management intended to select option iii as a result of excluding revenues that were generally not negatively impacted by the COVID-19 pandemic (residential living, home care, and other resident care related service revenues). Management will select option iii on future HRSA PRF Reporting Portal submissions. If the U.S. Department of Health and Human Services has questions regarding this plan, please call Diane Aston, CFO at (717) 786-5245.