Butler Health System and SubsidiariesNon-Profit

COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA No. 93.498 U.S. Department of Health and Human Services Criteria or specific requirement – Reporting (45 CFR 75.342) Condition – The System is required to prepare and submit period 4 and period 5 provider relief fund reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs – None Context – Errors were made in the System’s Option iii Lost Revenues reported in periods 4 and 5. Specifically, certain Lost Revenues experienced during the period of availability were not reported; however, when these errors are considered, the System’s available Lost Revenue increased from what was originally reported in periods 4 and 5. Effect – Errors were identified in the System’s Option iii quarterly Lost Revenue totals reported to HHS; however, when these errors are considered, the System’s total Provider Relief Fund payments applied to lost revenues did not change from what was originally reported in periods 4 or 5. Cause – The System’s internal controls did not properly identify certain reporting requirements for the Provider Relief Fund and American Rescue (ARP) Rural Distributions. Identification of a repeat finding – Is a repeat finding. See 2022-004 in Summary of Prior Audit Findings. Recommendation – Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.

COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116- 136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) Condition ? Butler Ambulatory Surgery Center, LLC (the ?Surgery Center?) is a joint venture that operates an ambulatory surgery center. The System maintains a 51 percent ownership share in the Surgery Center. The Surgery Center was required to file a Period 2 Provider Relief Fund (PRF) report during the year; however, did not maintain adequate documentation to support the other PRF expenses were attributable to coronavirus and/or had not been or were not eligible to be reimbursed by other sources. Questioned Costs ? $681,390 Context ? The Surgery Center utilized PRF payments received on salaries and employee benefits without identifying portions of employee?s time directly attributed to coronavirus. The Surgery Center also utilized PRF payments received on annual insurance premiums, without identifying the portion of the increased premiums attributable to coronavirus. In addition, the Surgery Center utilized PRF payments received on their entire monthly building rent costs for the clinic, without identifying the portion of expense attributable to coronavirus. The Surgery Center was unable to provide adequate documentation to support the other PRF expenses had not been or were not eligible to be reimbursed by other sources. Effect ? The Surgery Center utilized PRF payments received on expenses that were not documented as attributable to coronavirus, were potentially reimbursed by other sources, and/or were not allowable in accordance with other guidance issued by HHS. Cause ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution is a new program with complex and evolving regulations and compliance requirements. Internal controls were not in place to ensure the Surgery Center correctly applied the guidance. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over allowable activities and federal grant reporting should be modified to ensure expenditures charged to grants are for activities allowed and federal grant reports are prepared using complete and accurate information.

COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement ? Reporting (45 CFR 75.342) Condition ? The System is required to prepare and submit period 2 and period 3 provider relief fund reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs ? None Context ? Errors were made in the System?s Option iii Lost Revenues reported in periods 2 and 3. Specifically, certain Lost Revenues experienced during the period of availability were not reported; however, when these errors are considered, the System?s available Lost Revenue increased from what was originally reported in periods 2 and 3. Effect ? Errors were identified in the System?s Option iii quarterly Lost Revenue totals reported to HHS; however, when these errors are considered, the System?s total Provider Relief Fund payments applied to lost revenues did not change from what was originally reported in periods 2 or 3. Cause ? The System?s internal controls did not properly identify certain reporting requirements for the Provider Relief Fund and American Rescue (ARP) Rural Distributions. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.