MENNO HAVEN, INC.

Finding 2022-001: Significant Deficiency in Internal Control Over Compliance - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Assistance Listing Number: 93.498 - COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: N/A Repeat of Prior Year Finding: 2021-001 Award Number / Year: N/A / 2021 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Provider Relief Fund (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the U.S. Department of Health and Human Services (HHS). Activities allowed have been defined as health care related expenses used to prevent, prepare for and respond to coronavirus or lost revenues that are attributable to coronavirus. Condition / Context: During the audit of the program in the prior year, known questioned costs of $30,174 were identified related to expenses improperly applied to the funding. In the Period 4 submission, the Organization should have corrected the error by reducing lost revenues reported for the amount of known questioned costs identified in the prior year as instructed by the Health Resources and Service Administration (HRSA). Lost revenues reported in the Period 4 submission were not properly reduced for the known questioned costs identified. In addition, the Period 4 submission and lost revenue calculation did not contain a review and approval prior to submission to detect potential errors of this nature. This is not a statistically valid sample. Effect: The lost revenue amount reported to HRSA was not in accordance with established U.S. Department of Health and Human Services reporting guidance. The error identified above would have reduced lost revenues from $4,087,274 to $4,057,100 on funding received of $1,078,957. Questioned Costs: None reported Cause: An oversight by management during the review process that failed to identify that lost revenues were not adjusted for the known questioned costs identified in the prior year audit in the Period 4 submission. Recommendation: We recommend that management revisit their review process to ensure that the submissions and underlying details are reviewed prior to filing with HRSA. In addition, the organization should correct the error identified on their next submission to reduce lost revenues reported for the known questioned costs identified above. View of Responsible Officials: The Organization agrees with this finding. The next required filing will be reduced by the $30,174 which should have been done in Period 4. Segregation of duties between the preparation of the reports and the review/approval of them, including reviewing all supporting documents, is in place. Going forward once the information is reviewed it will be clearly stated that everything has been reviewed and to the best of the reviewer?s knowledge everything is correct, dated and signed prior to filing the information. This will be reported to the Finance Committee and Board so that it will be in the minutes.

Finding 2021-001 ? Material Weakness in Internal Control over Compliance, Material Noncompliance - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Assistance Listing Number: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: N/A Award Number / Year: N/A / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Provider Relief Fund (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the U.S. Department of Health and Human Services (HHS). Activities allowed have been defined as health care related expenses used to prevent, prepare for, and respond to coronavirus or lost revenues that are attributable to coronavirus. Condition / Context: During our testing of the COVID personnel expenses, we observed 24 of 40 selections that did not represent incremental costs due to COVID. It was determined that while incremental COVID personnel expenses were properly tracked in the payroll system, the wrong data was used from the payroll system on the COVID expenses reporting. Additionally, the reporting did not contain a review and approval prior to submission to detect potential errors of this nature. Effect: The Organization lacks proper segregation of duties with respect to the accumulation and reporting of the COVID personnel expense amount, which resulted in errors in the reporting of COVID personnel expenses. Proper segregation of duties is necessary to prevent a situation where one individual handles a transaction from beginning to end in order to reduce the potential for noncompliance due to error or fraud. As a result of the errors, $30,174 of $44,654 personnel expenses population tested were not in compliance with the terms and conditions of the PRF. The total population of personnel costs reported as PRF expenses by the Organization was $682,488 and thus projected errors would be $461,177. Questioned Costs: $30,174 Cause: It was determined that while incremental COVID personnel expenses were properly tracked in the payroll system, the wrong data was used from the payroll system on the COVID expenses reporting. Additionally, the reporting did not contain a review and approval prior to submission to detect potential errors of this nature. Recommendation: We recommend that management review the procedures for filing their required reporting to ensure that the correct payroll data is used and that only allowable incremental costs related to COVID are included. We also recommend that these reports are reviewed by an independent reviewer that signs and dates for evidence of the review. View of Responsible Officials: The Organization will implement a review process and ensure there is segregation of duties for the accumulation and reporting of COVID personnel expenses. After the information is gathered and reported by the payroll accountant, the CFO will review and approve the data. After review and documentation that there has been a review, the reporting will be submitted. Additionally, the Organization has sufficient lost revenues to cover the questioned costs and will correct in future reporting.