Central Montana Medical CenterNon-Profit

Department of Health and Human Services Federal 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 #237169043 Reporting Material Weakness in Internal Control Over Compliance and Material 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: The Facilities did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 4 to ensure accurate quarterly reporting of net patient revenue. Effect: Key line items for reporting related to lost revenue were materially misstated. No lost revenue was claimed during the current period. Questioned Costs: None reported. Context/Sampling: Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No. Recommendation: Management should enhance its internal controls over federal award compliance and review to ensure proper reporting of net patient care revenue. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal 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 #237169043 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 an entity must establish and maintain effective internal control over a 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 – The Facilities claimed equipment costs under the Provider Relief Fund program for a project that was not complete at the end of the period of availability, or December 31, 2022. Cause – The Facilities’ internal control process in place to ensure review and approval of expenses claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 4, did not detect the error. Effect – Costs were improperly included within the Period 4 report and caused the reporting submitted to the Department of Health and Human Services to be inaccurate. Questioned Costs – $15,019. Context/Sampling – Detail testing was completed over $1,099,098 of the expenses for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 4 items were selected for detail testing, which accounted for $991,840 of $1,099,098 of direct program expenditures. One $15,019 invoice, net of reimbursed costs within the sample was deemed a questioned cost, as the equipment was not placed into service as of December 31, 2022. There is a known error of $15,019 for all costs claimed on the Period 4 report related to the equipment. Repeat Finding from Prior Year – No. Recommendation – We recommend that management implement procedures to ensure the costs claimed meet the requirements of the federal program. In addition, we recommend that the Facilities enhance internal control policies to ensure all costs are reviewed to ensure that they are within the period of availability defined by the terms and conditions. Views of Responsible Officials – Management agrees with the finding.

2021-005 - Department of Health and Human Services Federal Assistance Listing/CFDA # 93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 # TIN #237169043 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria ? 2 CFR 200.303(a) establishes that an entity must establish and maintain effective internal control over a 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 ? The Facilities? report submitted to the Department of Health and Human Services for Period 1 had no evidence of review and approval by a separate individual outside of the preparer. Cause ? The Facilities did not have an internal control process in place to ensure review and approval of the eligible expenditures and the lost revenue calculation claimed under the federal program and the report submitted to the Department of Health and Human Services (HHS) for Period 1 was documented. Effect ? Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs ? None reported. Context ? Key line items were tested on the Period 1 HHS reports. Repeat Finding from Prior Year(s) ? No. Recommendation ? We recommend the Center enhance internal control policies to ensure all eligible expenditures, lost revenue calculation and reporting are reviewed and approved to ensure that they are appropriate and in accordance with program requirements. Views of Responsible Officials ? Management agrees with the finding.

2021-006 - Department of Health and Human Services Federal Assistance Listing/CFDA # 93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 # TIN #237169043 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria ? 2 CFR 200.303(a) establishes that an entity must establish and maintain effective internal control over 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 ? The Facilities claimed expenses under the Provider Relief Fund program that were not properly supported by invoices or payroll documentation - $29,792, costs that were incurred outside the period of availability - $87,259, and costs that did not represent expenses incurred to prevent, detect or treat COVID-19 - $66,483. The total amount of costs which were improperly reported was $183,534. The Facilities reported a Lost Revenues Eligible for Reimbursement totaling $999,317 and Other PRF Remaining for Possible Lost Revenues Reimbursement of $799,445, creating unapplied lost revenue of $199,872. Cause ? The Facilities? internal control process in place to ensure review and approval of expenses claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 1, did not detect an error. Effect ? Costs were improperly included within the Period 1 report and caused the reporting submitted to the Department of Health and Human Services to be inaccurate. The correct Other PRF Remaining for Possible Lost Revenues Reimbursement should have been $982,979, creating unapplied lost revenue of $16,338. Questioned Costs ? None reported. Context/Sampling ? Detail testing was completed over $2,995,768 of the expenses and summary level testing was completed on $819,847 of expenses. A sample of 65 expenditures were selected for sample testing, which accounts for $861,200 of $3,815,615 direct program expenditures. Within the $861,200 sample, $116,311 expenditures did not agree to the vendor invoice or payroll timecard and/or were for maintenance contracts that were effective outside the period of availability. Summary level testing completed over $819,847 of claimed expenses indicated costs totaling $66,483 that did not represent expenses incurred to prevent, detect or treat COVID-19. Repeat Finding from Prior Year(s) ? No. Recommendation ? We recommend that management implement procedures to ensure the costs claimed meet the requirements of the federal program. In addition, we recommend that the Facilities enhance internal control policies to ensure all costs are reviewed to ensure that they are necessary and correct. Views of Responsible Officials ? Management agrees with the finding.

2021-007 - Department of Health and Human Services Federal Assistance Listing/CFDA # 93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 # TIN #237169043 Reporting Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria ? 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, terms and conditions of the federal award. The Facilities selected option 1 to calculate lost revenue which consists of a comparison of 2019 actual results to 2020 and 2021 actual results by quarter. Patient care-related revenue should be reported net of adjustments for all third-party payers, charity care adjustments, bad debt, and any other discounts or adjustments, as applicable when reporting patient care related revenue sources. Condition ? The Facilities? final expenditures identified as lost revenue and claimed under the Provider Relief Fund program were not calculated under a method which was based on the fiscal year of the Facilities and did not include the correct amounts for revenue for each of the quarters in the report submitted to the Department of Health and Human Services (HHS) for Period 1. Cause ? The Facilities? internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the report submitted to HHS for Period 1, did not detect an error. Effect ? The reporting to HHS for Period 1 was considered incorrect. The Facilities reported amounts for Period 1 which were considered incorrect. Total lost revenue reported to HHS was $999,317. The total amount which should have been reported, based on the internal financial statements, was $2,210,711. Questioned Costs ? None reported. Context/Sampling ? Key line items were tested on the Period 1 HHS report. Repeat Finding from Prior Year(s) ? No. Recommendation ? We recommend the Facilities implement procedures to ensure the lost revenue is calculated in accordance with the terms and conditions of the federal program. Views of Responsible Officials ? Management agrees with the finding.