THOMAS HEALTH SYSTEM, INC.Non-Profit

2022-001: Significant Deficiency in Internal Controls Over Compliance Program COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 Federal Agency U.S. Department of Health and Human Services Award Number N/A Award Year 2021 and 2020 Compliance Requirement Reporting Questioned Costs N/A Repeat of Prior Year Finding 2021-001 Criteria All recipients of Provider Relief Funds (PRF) payments must comply with 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. Condition and Context The System did not complete the PRF reporting for Period 2 in accordance with the U.S. Department of Health and Human Services guidance due to errors in the underlying data that lead to errors in the Period 2 report that was submitted. In the period 2 Submission, the System reported $2,283,650 of COVID-19 expenses, but failed to reduce the expenses by amounts reimbursed by other sources. Management updated their policies and procedures prior to Reporting Period 3 to address this issue. The System had $42,620,438 of lost revenue through Period 2 reporting and has received $17,690,624 in PRF payments.Effect The amounts reported to HRSA during Period 2 reporting were not in accordance with established U.S. Department of Health and Human Services guidance. Cause The System has insufficient controls in place to identify and correct errors before reporting for Period 2 was completed. Recommendation We recommend that Management to continue to follow their newly established policy and procedures to ensure that the most recent guidelines are reviewed and understood and that all information is detail reviewed and errors addressed before reporting. View of Responsible Officials Management agrees with the finding, and policy and procedures were updated before reporting Period 3. Period 3 and 4 reporting were completed in accordance with the U.S. Department of Health and Human Services most guidance. The System received a notice from the Department of Health & Human Services dated December 29, 2022 that HRSA's Division of Financial Integrity has determined that the findings cited in the Single Audit Report for fiscal year October 1, 2020 through September 30, 2021 has been satisfactorily resolved.

Program: Provider Relief Fund AL Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: 2020 Compliance Requirement: Reporting Questioned Costs: None Criteria: All recipients of Provider Relief Funds (PRF) payments must comply with 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. Condition and Context: The System did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. We noted that the System had errors in the underlying data that lead to errors in the report that were submitted. The System had insufficient controls in place to enable it to properly follow the reporting guidance. Effect: The amounts reported to HRSA were not in accordance with established U.S. Department of Health and Human Services guidance. When using the proper guidance and amounts, the System had sufficient expenses and lost revenue to justify retaining the PRF received. Cause: The System has insufficient controls in place to identify and correct errors before reporting was completed. Recommendation: We recommend that Management implement procedures to ensure that the most recent guidelines are reviewed and understood and that all information is detail reviewed and errors addressed before reporting. View of Responsible Officials: Thomas Health System, Inc. and its subsidiaries agrees with the finding.