Indiana University Health Inc.Non-Profit

2024-001 – Scope Limitation – E. Eligibility Identification of the federal program: Federal Agency: U.S. Department of Agriculture Assistance Listing No.: 10.557 – Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Pass-through Entity and Award Periods: Indiana Department of Health – October 1, 2023 through September 30, 2024, and October 1, 2024 through September 30, 2025 Criteria or specific requirement (including statutory, regulatory, or other citation): Applicants for WIC program benefits are screened at WIC clinic sites to determine their WIC eligibility. To be certified as eligible, they must meet various eligibility criteria as outlined in 7 CFR sections 246.7(c), (d), (e), (g), and (l). When an applicant meets all eligibility criteria, he/she is determined by WIC clinic staff to be eligible for program benefits. Certification periods are assigned to each participant based on categorical status for women, infants, and children (7 CFR section 246.7(g)). A WIC local agency assigns each eligible person a priority classification according to the classification system described in 7 CFR section 246.7(e)(4). A person’s priority assignment reflects the severity of his/her nutritional risk. If the local agency cannot immediately place the person on the program for lack of an available caseload slot, the person is placed on a waiting list. Caseload vacancies are filled from the waiting list in priority classification order. State agencies are expected to target program outreach and caseload management efforts toward persons at greatest nutritional risk (i.e., those in the highest priority classifications). Condition: Indiana University Health, Inc. and Subsidiaries screen applicants for eligibility by following the State of Indiana guidelines as provided through the INWIC system used to enter, track, and store information about applicants. Based on guidance from the Department of Agriculture, states were encouraged to move to a paperless system. The State of Indiana has followed that guidance and does not require participating entities to retain copies of an applicant’s proof of residence, income, etc. regarding eligibility. Therefore, we were not able to test internal controls over compliance or compliance over the eligibility compliance requirement and have issued a qualified opinion based on the scope limitation. Cause: Indiana University Health, Inc. and Subsidiaries follow a paperless system as supported by the State of Indiana and the U.S. Department of Agriculture. Effect or potential effect: A scope limitation qualified opinion was issued for Assistance Listing No. 10.557, as we were unable to obtain sufficient documentation supporting the compliance of Indiana University Health, Inc. and Subsidiaries regarding eligibility. Questioned costs: None. Context: Federal expenditures reported in the schedule of expenditures of federal awards for Assistance Listing No. 10.557 totaled $1,699,733 for the year ended December 31, 2024. Identification as a repeat finding, if applicable: This is a repeat of finding 2023-001. Recommendation: Not practical. Views of responsible officials: As Indiana University Health, Inc. and Subsidiaries follow the State of Indiana’s paperless system, as described above, which is also supported by 7 CFR 246, no further corrective action will be taken.

Finding 2024-002 – A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles, and C. Cash Management Identification of the federal program: Federal Agency: U.S. Department of Agriculture Assistance Listing No.: 10.557 – Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Pass-through Entity and Award Periods: Indiana Department of Health – October 1, 2023 through September 30, 2024, and October 1, 2024 through September 30, 2025 Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the grant agreement, WIC grantees are required to submit claims to the State within 20 calendar days following the end of the month in which work on or for the project was performed. The allowable costs are outlined per the grant agreement, which explicitly indicates that salaries and fringe benefits are allowable for the personnel and positions within the agreement. Condition: Indiana University Health, Inc. and Subsidiaries received reimbursement for $3,035.95 in ineligible salaries and fringe benefits expenditures under the Indiana Department of Health Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) grant for the period October 1, 2024 through September 30, 2025. The ineligible expenditures were submitted for reimbursement for October 2024 and related to ineligible salaries and fringe benefits for an employee who had transferred into the WIC program during the month. Due to the timing of the transfer, which occurred mid-month, ineligible salaries and fringe benefits of $3,035.95 from the non-grant-funded position held by the individual for the portion of the month prior to the transfer were erroneously included in the request for reimbursement. The Principal Investigator and Grants Accounting failed to exclude from the reimbursement request the identified salaries and fringe benefits that they identified as being related to the pay period prior to the employee’s transfer, and, as a result, ineligible expenditures were requested for reimbursement. Cause: Indiana University Health, Inc. and Subsidiaries’ internal control over the review of WIC expenditures and requests for reimbursement was not operating effectively during the year ended December 31, 2024. Effect or potential effect: Ineligible salaries and fringe benefits expenditures were submitted for reimbursement and reimbursed. Questioned costs: None. Context: Indiana University Health, Inc. and Subsidiaries were reimbursed for $3,035.95 in ineligible salaries and fringe benefits expenditures under the WIC program during the year ended December 31, 2024. We selected 25 monthly WIC expenditures, totaling $1,612.24, for purposes of allowability and cash management compliance testing. For each expenditure, we obtained and reviewed support for the expenditure eligibility under the WIC grant, and we also traced the expenditure to the WIC claims workbook and request for reimbursement. In performing this procedure, we identified that Indiana University Health, Inc. and Subsidiaries had incorrectly included two pay periods of ineligible salaries and fringe benefits in the October 2024 request for reimbursement, and, as a result, ineligible expenditures were reimbursed. Through discussion with management, it was determined that the ineligible expenditures related specifically to the process for identifying inter-departmental transfers and reconciling adjustments to salaries and fringe benefits for any ineligible salaries and fringe benefits within the pay period to the request for reimbursement. Total federal expenditures for Assistance Listing No. 10.557 totaled $1,699,733 for the year ended December 31, 2024. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Indiana University Health, Inc. and Subsidiaries should ensure that the monthly requests for reimbursement include any expenditures identified in the monthly review and any necessary action is taken for any discrepancies identified during the preparation prior to submission for reimbursement. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries agree that ineligible expenditures were included in the October 2024 WIC request for reimbursement. Management has evaluated processes and procedures and made necessary changes to identify new or transferred employees and to ensure any ineligible salaries and fringe benefits are not submitted for requests for reimbursement in future periods. Furthermore, Indiana University Health, Inc. and Subsidiaries reviewed submitted salaries and fringe benefits for all employees who transferred into the WIC program during the grant periods and concluded that expenditures submitted for these employees were in compliance with the grant agreements

Finding 2023-001 (Scope Limitation – E. Eligibility) Identification of the federal program: Federal Agency: United States Department of Agriculture Assistance Listing No.: 10.557 – Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Pass-through Entity and Award Periods: Indiana Department of Health – October 1, 2022 through September 30, 2023 and October 1, 2023 through September 30, 2024 Criteria or specific requirement (including statutory, regulatory or other citation): Applicants for WIC Program benefits are screened at WIC clinic sites to determine their WIC eligibility. To be a certified eligible, they must meet various eligibility criteria as outlined in 7 CFR sections 246.7(c), (d), (e), (g), and (l). When an applicant meets all eligibility criteria, he/she is determined by WIC clinic staff to be eligible for program benefits. Certification periods are assigned to each participant based on categorical status for women, infants, and children (7 CFR section 246.7(g)). A WIC local agency assigns each eligible person a priority classification according to the classification system described in 7 CFR section 246.7(e)(4). A person’s priority assignment reflects the severity of his/her nutritional risk. If the local agency cannot immediately place the person on the program for lack of an available caseload slot, the person is placed on a waiting list. Caseload vacancies are filled from the waiting list in priority classification order. State agencies are expected to target program outreach and caseload management efforts toward persons at greatest nutritional risk (i.e., those in the highest priority classifications). Condition: Indiana University Health, Inc. and Subsidiaries screen applicants for eligibility by following the State of Indiana guidelines as provided through the INWIC system used to enter, track, and store information about applicants. Based on guidance from the Department of Agriculture, states were encouraged to move to a paperless system. The State of Indiana has followed that guidance and does not require participating entities to retain copies of an applicant’s proof of residence, income, etc. regarding eligibility. Therefore, we were not able to test internal controls over compliance or compliance over the eligibility compliance requirement and have issued a qualified opinion based on the scope limitation. Cause: Indiana University Health, Inc. and Subsidiaries follow a paperless system as supported by the State of Indiana and the U.S. Department of Agriculture. Effect or potential effect: A scope limitation qualified opinion was issued for Assistance Listing No. 10.557 as we were unable to obtain sufficient documentation supporting the compliance of Indiana University Health, Inc. and Subsidiaries regarding eligibility. Questioned costs: None. Context: Federal expenditures reported in the schedule of expenditures of federal award for Assistance Listing No. 10.557 totaled $1,733,429 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: This is a repeat of finding 2020-001. Recommendation: Not practical. Views of responsible officials: As Indiana University Health, Inc. and Subsidiaries follows the state of Indiana’s paperless system, as described above, which is also supported by 7 CFR 24, no further corrective action will be taken.

Finding 2023-002 (L. Reporting) Identification of the federal program: Federal Agency: United States Department of Housing and Urban Development Assistance Listing No.: 14.241 – Housing Opportunities for Persons with AIDS (HOPWA) Pass-through Entities and Award Periods: Indiana Housing and Community Development Authority (IHCDA) – July 1, 2022 through June 30, 2023 and July 1, 2023 through June 30, 2024 and City of Indianapolis – April 1, 2022 through March 31, 2023 and April 1, 2024 through March 31, 2024 Criteria or specific requirement (Including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Under the grant agreements, HOPWA grantees are required to submit performance reporting, specifically a HUD-40-110-D, HOPWA Consolidated Annual Performance and Evaluation Report (CAPER), no later than 90 days after the close of the program or operating year, as required per 24 CFR section 574.520. Condition: The CAPER submission submitted by Indiana University Health, Inc. and Subsidiaries for the IHCDA grant for the period July 1, 2022 through June 30, 2023, incorrectly excluded $3,600 in funds expended on eligible activities (specifically, support services). For both the HOPWA CAPER submissions, the documentation retained did not support the extent of the review procedures performed prior to the CAPER submissions. Cause: Indiana University Health, Inc. and Subsidiaries’ internal control over the CAPER reporting process was not operating effectively during the year ended December 31, 2023. Effect or potential effect: Incorrect CAPER submissions were filed with HUD as a result of the control not operating effectively. Questioned costs: None. Context: Indiana University Health, Inc. and Subsidiaries submitted two CAPER reports during the year ended December 31, 2023. EY tested both CAPER reports for testing of internal controls over compliance and compliance for HOPWA reporting. The CAPER submission for the IHCDA grant for the period July 1, 2022 through June 30, 2023, incorrectly excluded $3,600 in funds expended on eligible activities. The documentation retained for both reports filed did not support the extent of the review procedures performed prior to the CAPER submissions. Total federal expenditures for Assistance Listing No. 14.241 totaled $1,201,378 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Indiana University Health, Inc. and Subsidiaries should ensure the completed CAPER and underlying support are sufficiently reviewed to identify discrepancies and documentation of those review procedures are maintained prior to submitting the CAPER. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries believes it appropriately designed procedures and internal controls over the HOPWA reporting requirements. Indiana University Health, Inc. and Subsidiaries agrees that the CAPER submission for the IHCDA grant for the period of July 1, 2022 through June 30, 2023, contained incomplete and inaccurate information. Indiana University Health, Inc. has revisited the internal control over HOPWA performance reporting

Finding 2022-01 ? Reporting Identification of the federal program: Assistance Listing No. 93.498 ? COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Criteria or specific requirement (Including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Providers who received one or more PRF or ARP payments greater than $10,000 in the aggregate were required to report on the use of the funds to the Health Resources & Services Administration (HRSA) Reporting Portal. The U.S. Department of Health and Human Services (HHS) requires the nonfederal entity to report lost revenue in order to support that funding received has been appropriately earned. HHS provided specific guidance in the June 11, 2021 Post-Payment Notice on how to complete the required reporting of lost revenue in the HRSA Reporting Portal. Under this guidance, recipients may choose to apply PRF and ARP payments towards lost revenue using one of the following options: ? Option i ? Up to the amount of the difference between actual patient care revenue ? Option ii ? Up to the amount of the difference between budgeted and actual patient care revenue, if the budget was established and approved prior to March 27, 2020 ? Option iii ? Up to the amount calculated by any reasonable method of estimating revenue Condition: Indiana University Health?s reporting submissions did not follow the published HRSA guidance related to the reporting of lost revenue. Cause: While Indiana University Health had designed and implemented internal controls over the allowability of expenses and amounts submitted in the HRSA and ARP reports, these internal controls were not precise enough to identify the submissions were not compliant with HRSA reporting guidance. Effect or potential effect: Noncompliance with HRSA reporting guidance could result in the submission of ineligible lost revenue to the HRSA Reporting Portal. Questioned costs: None. Context: We inspected the reconciliations of lost revenue to the Period 3 and Period 4 reports, determining the lost revenue submitted under Period 3 and Period 4 was based on the difference between actual and budgeted patient care revenue based on the 2022 budget, which was not approved prior to March 27, 2020. Management indicated the selection of Option ii was based on discussions with HRSA during the spring of 2022. Total federal expenditures for Assistance Listing No. 93.498 totaled $79,209,671 for the year ended December 31, 2022, which included $19,428,311 in lost revenue. Identification as a repeat finding: This is not a repeat finding. Recommendation: HRSA does not allow reporting entities to amend a previously submitted report after the reporting period has passed. Indiana University Health should plan to complete the Period 5 submissions using Option iii for the calculation of lost revenue, if a budget approved prior to March 27, 2020 does not exist. Views of responsible officials: Indiana University Health believes it appropriately designed and implemented the appropriate policies, procedures, and internal controls over the PRF and ARP reporting requirements. However, Indiana University Health agrees that the 2022 budget was not approved prior to March 27, 2020, but management asserts the Period 3 and Period 4 reports were filed in accordance with guidance obtained directly from HRSA. Furthermore, management asserts the amount of lost revenue submitted for Period 3 and Period 4 would not change, regardless of the lost revenue option selected.

Finding 2020-001 (Scope Limitation - Eligibility) Information on the Federal Program: Assistant Listing 10.557 ? Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (Department of Agriculture Passed Through the Indiana State Department of Health): Pass-Through Grant or Contract Number Federal Grant or Contract Number Location Budget Period #38119 202IN002W1003 and 192IN012W5003 Bloomington 10/1/19-9/30/20 #38120 202IN002W1003 and 192IN012W5003 IUH ? Morgan 10/1/19-9/30/20 #38129 202IN002W1003 and 192IN012W5003 IUH ? White 10/1/19-9/30/20 #46312 212IN002W1003 and 202IN012W5003 Bloomington 10/1/20-9/30/21 #46317 212IN002W1003 and 202IN012W5003 IUH ? Morgan 10/1/20-9/30/21 #46318 202IN002W1003 and 192IN012W5003 IUH ? White 10/1/20-9/30/21 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Applicants for WIC program benefits are screened at WIC clinic sites to determine their WIC eligibility. To be certified eligible, they must meet the following eligibility criteria (7 CFR sections 246.7(c), (d), (e), (g), and (l)): a. Categorical ? Eligibility is restricted to pregnant, postpartum, and breast-feeding women; infants; and children up to their fifth birthday (7 CFR sections 246.2 (definition of each category) and 246.7(c)).b. Identity and Residency ? Except in limited circumstances, WIC applicants must be physically present for eligibility screenings and must provide proof of identity. An applicant must also meet the state agency?s residency requirement. Except in the case of Indiana state agencies, the applicant must reside in the jurisdiction of the state. Indiana state agencies may require applicants to reside within their jurisdiction. All state agencies may designate service areas for any local agency and may require that applicants reside within the service area. A state agency must establish procedures, in accordance with guidance from Food and Nutrition Service, to prevent the same individual from receiving duplicate benefits through participation at more than one local agency. Except under limited circumstances, WIC applicants must present proof of identity and residency at certification. Documentation of these determinations may consist of descriptions of documents evidencing the applicants? identities and residency (e.g., notations in the participant?s file identifying specific documents that local agency staff have viewed and found acceptable), copies of the documents themselves, and/or the applicants? written statements of identity and residency when no other documentation exists. Certification procedures prescribed by the state agency set conditions for relying on these different forms of documentation (42 USC 1786(f)(23); 7 CFR sections 246.7(c)(1) and (c)(2)(i), 246.7(i)(3) and (4)) c. Income ? An applicant must meet an income standard established by the state agency or be determined to be automatically (adjunctively) income-eligible based on documentation of his/her eligibility, or certain family members? eligibility, for the following federal programs: (1) Temporary Assistance for Needy Families; (2) Medicaid; or (3) Supplemental Nutrition Assistance Program (formerly the Food Stamp Program). State agencies may also determine an individual automatically income-eligible, based on documentation of his/her eligibility for certain state-administered programs. Documentation of income eligibility determinations may consist of descriptions of documents evidencing the sources and gross amounts of all income such as wages, disability or Social Security/SSI payments, child support and alimony received by applicants and/or any members of their households (e.g., notations in the participant?s file identifying specific documents that local agency staff have viewed and found acceptable), copies of the documents themselves, and/or the applicant?s signed affidavit that his/her household income does not exceed the current WIC income eligibility guidelines when no other documentation exists. With limited exceptions, applicants who are not adjunctively or automatically income eligible for WIC must provide documentation of family income at their initial or subsequent certification (42 USC 1786(d)(3)(D); 7 CFR sections 246.2 (definition of ?family?), 246.7(c), and 246.7(d)).Income Guidelines ? The income standard established by the State agency may be up to 185% of the poverty income guidelines issued annually by Health and Human Services or state or local income guidelines used for free and reduced-price health care. However, in using health care guidelines, the income guidelines for WIC must be between 100% and 185% of the poverty income guidelines. Local agency income guidelines may vary as long as they are based on the guidelines used for free and reduced-price health care (7 CFR section 246.7(d)(1)). Income determinations based on state or local health care guidelines are subject to the definition of ?family? in 7 CFR section 246.2, the definition of ?income? in 7 CFR section 246.7(d)(2)(ii), and the exclusions from income in 7 C e. Income Eligibility Determination ? Except for applicants determined to be automatically income-eligible, income is based on gross income and other cash readily available to the family or economic unit. Certain federal payments and benefits, listed at 7 CFR section 246.7(d)(2)(iv)), are excluded from the computation of income. State agencies may instruct local agencies to consider family income over the preceding 12 months or the family?s current rate of income, whichever indicator more accurately reflects the family?s income status. However, applicants in which an adult member is unemployed shall have income determined based on the period of unemployment. A state or local agency may require verification of information which it determines necessary to confirm income eligibility (7 CFR sections 246.7(d)(2)(i) and (v)). f. Nutritional Risk ? A competent professional authority (e.g., physician, nutritionist, registered nurse, or other health professional) must determine that the applicant is at nutritional risk. While the broad guidelines for determining nutritional risk are set forth in WIC legislation and regulations, the specific allowable nutritional risk criteria are defined in WIC policy guidance, which is updated periodically. Each state agency may choose which allowable nutritional risk criteria will be used to determine eligibility. At a minimum, the certifying agency must perform and/or document measurements of each applicant?s height or length and weight. In addition, a hematological test for anemia must be performed or documented at certification if the applicant has no nutritional risk factor prescribed by the state agency other than anemia. Certified applicants with qualifying nutritional risk factors other than anemia must also be tested for anemia within 90 days of the date of certification. Program regulations set several exceptions to these general rules. The determination of nutritional risk may be based on current referral data provided by a competent professional authority who is not on the WIC staff (7 CFR sections 246.2 (definitions of ?competent professional authority? and ?nutritional risk?) and 246.7(e)).When an applicant meets all eligibility criteria, he/she is determined by WIC clinic staff to be eligible for program benefits. Certification periods are assigned to each participant based on categorical status for women, infants, and children (7 CFR section 246.7(g)). A WIC local agency assigns each eligible person a priority classification according to the classification system described in 7 CFR section 246.7(e)(4). A person?s priority assignment reflects the severity of his/her nutritional risk. If the local agency cannot immediately place the person on the program for lack of an available caseload slot, the person is placed on a waiting list. Caseload vacancies are filled from the waiting list in priority classification order. State agencies are expected to target program outreach and caseload management efforts toward persons at greatest nutritional risk (i.e., those in the highest priority classifications). Pregnant women are certified for the duration of their pregnancies and for up to six weeks postpartum. Breast-feeding women may be certified approximately every six months, up to one year postpartum, or until the woman ceases breastfeeding, whichever occurs first (7 CFR section 246.7(g)(1)). Infants are certified at intervals of approximately six months, except that infants under six months of age may be certified for a period extending up to the child?s first birthday, provided the quality and accessibility of health care services are not diminished. Children are certified for six-month intervals ending with the last day of the month in which the child reaches the fifth birthday. State agencies also have the option to certify children for a period of one year if the state agency ensures that the child receives the required health and nutrition assessments (7 CFR section 246.7(g)(1)). Non-breastfeeding women are certified for up to six months postpartum. All categories of participants may be certified up to the last day of the last month of the certification period (7 CFR section 246.7(g)(1)). Condition: Indiana University Health, Inc. and Subsidiaries screen applicants for eligibility by following the state of Indiana guidelines as provided through the Convansys system used to enter, track, and store information about applicants. Based on guidance contained in 7 CFR section 246, states were encouraged to move to a paperless system. Specifically, federal guidance contained in 7 CFR 246.7 (i)(4) and (5)(i) outlines acceptable documentation to be included on certification forms as (1) a description of the document(s) used to determine residency and identity or a copy of the document(s) used or the applicant?s written statement when no documentation exists and (2) a description of the document(s) used to determine income eligibility or a copy of the document(s) in the file. The state of Indiana has followed that guidance and does not requireIndiana University Health, Inc. and Subsidiaries to retain copies of an applicant?s proof of residence, income, etc., regarding eligibility. Therefore, we were not able to test internal controls over compliance or compliance over the eligibility compliance requirement through reperformance and have issued a qualified opinion based on the scope limitations. Cause: Indiana University Health, Inc. and Subsidiaries follow a paperless system as supported by the state of Indiana and the U.S. Department of Agriculture. As such, third-party supporting documentation of eligibility determinations is not retained. Effect or Potential Effect: A scope limitation qualified opinion was issued for Assistance Listing 10.557 as we were unable to obtain sufficient documentation supporting the compliance of Indiana University Health, Inc. and Subsidiaries? eligibility. Questioned Costs: None. Context: Federal expenditures reported in the schedule of expenditures of federal awards for Assistance Listing 10.557 totaled $1,252,669 for the year ended December 31, 2020. Identification as a Repeat Finding, If Applicable: This is a repeat finding. The prior year finding reference is 2019-001. Recommendation: Not practical. Views of Responsible Officials: As Indiana University Health, Inc. and Subsidiaries follows the state of Indiana?s paperless system as described above, which is also supported by 7 CFR 24, no further corrective action will be taken.

Finding 2020-002 - Activities Allowed or Unallowed and Eligibility Information on the Federal Program: Assistance Listing 93.461? COVID-19 Testing, Treatment and Vaccination for the Uninsured. Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: Indiana University Health, Inc. and Subsidiaries did not retain audit evidence to support the report logic that was developed to identify patients from the patient billing system who were identified as uninsured and as having an allowable COVID-19 testing and treatment or vaccination in accordance with the terms of the federal program. A risk exists that the data relevant to the COVID-19 uninsured program stored within the patient accounting system may be inappropriately created or modified. Evidence of the operation of controls identified to address this risk during the fiscal period under audit was not retained. In addition, supporting documentation was not retained to validate who had access to modify the report script, what changes were made to the script during the fiscal year, and how management validated the completeness and accuracy of the data extracted by the script. Cause: Management did not retain sufficient supporting documentation to provide evidence that controls over data integrity for this major program were designed effectively and placed in operation during the period under audit. Effect or Potential Effect: Evidence of controls addressing the risk that data within the patient accounting system may be inappropriately created or modified was not retained. The report used to identify eligible federal program participants could be inaccurate or incomplete or patients could be inappropriately identified as eligible, services could be reimbursed by HRSA for unallowable charges, or patients could be inappropriately billed for services that HRSA reimbursed under this program.Questioned Costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $870,174 for the year ended December 31, 2020. Identification as a Repeat Finding, If Applicable: This is not a repeat finding. Recommendation: Management should retain documentation of the operation of controls responsive to risks related to the data stored in its IT systems as evidence of control activities. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries agrees with the finding and has developed a plan to correct the finding.

Finding 2019-001 (Scope Limitation ? Eligibility) Information on the Federal Program: CFDA 10.557 ? Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (Department of Agriculture Passed Through the Indiana State Department of Health): See Schedule of Findings and Questioned Costs for chart/table Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Applicants for WIC program benefits are screened at WIC clinic sites to determine their WIC eligibility. To be certified eligible, they must meet the following eligibility criteria (7 CFR sections 246.7(c), (d), (e), (g), and (l)): a. Categorical ? Eligibility is restricted to pregnant, postpartum, and breast-feeding women; infants; and children up to their fifth birthday (7 CFR sections 246.2 (definition of each category) and 246.7(c)). b. Identity and Residency ? Except in limited circumstances, WIC applicants must be physically present for eligibility screenings and must provide proof of identity. An applicant must also meet the state agency?s residency requirement. Except in the case of Indiana state agencies, the applicant must reside in the jurisdiction of the state. Indiana state agencies may require applicants to reside within their jurisdiction. All state agencies may designate service areas for any local agency, and may require that applicants reside within the service area. A state agency must establish procedures, in accordance with guidance from Food and Nutrition Service, to prevent the same individual from receiving duplicate benefits through participation at more than one local agency. Except under limited circumstances, WIC applicants must present proof of identity and residency at certification. Documentation of these determinations may consist of descriptions of documents evidencing the applicants? identities and residency (e.g., notations in the participant?s file identifying specific documents that local agency staff have viewed and found acceptable), copies of the documents themselves, and/or the applicants? written statements of identity and residency when no other documentation exists. Certification procedures prescribed by the state agency set conditions for relying on these different forms of documentation (42 USC 1786(f)(23); 7 CFR sections 246.7(c)(1) and (c)(2)(i), 246.7(i)(3) and (4)). c. Income ? An applicant must meet an income standard established by the state agency or be determined to be automatically (adjunctively) income-eligible based on documentation of his/her eligibility, or certain family members? eligibility, for the following federal programs: (1) Temporary Assistance for Needy Families; (2) Medicaid; or (3) Supplemental Nutrition Assistance Program (formerly the Food Stamp Program). State agencies may also determine an individual automatically income-eligible, based on documentation of his/her eligibility for certain state-administered programs. Documentation of income eligibility determinations may consist of descriptions of documents evidencing the sources and gross amounts of all income such as wages, disability or Social Security/SSI payments, child support and alimony received by applicants and/or any members of their households (e.g., notations in the participant?s file identifying specific documents that local agency staff have viewed and found acceptable), copies of the documents themselves, and/or the applicant?s signed affidavit that his/her household income does not exceed the current WIC income eligibility guidelines when no other documentation exists. With limited exceptions, applicants who are not adjunctively or automatically income eligible for WIC must provide documentation of family income at their initial or subsequent certification (42 USC 1786(d)(3)(D); 7 CFR sections 246.2 (definition of ?family?), 246.7(c), and 246.7(d)). d. Income Guidelines ? The income standard established by the State agency may be up to 185% of the poverty income guidelines issued annually by Health and Human Services or state or local income guidelines used for free and reduced-price health care. However, in using health care guidelines, the income guidelines for WIC must be between 100% and 185% of the poverty income guidelines. Local agency income guidelines may vary as long as they are based on the guidelines used for free and reduced-price health care (7 CFR section 246.7(d)(1)). Income determinations based on state or local health care guidelines are subject to the definition of ?family? in 7 CFR section 246.2, the definition of ?income? in 7 CFR section 246.7(d)(2)(ii), and the exclusions from income in 7 CFR section 246.7(d)(2)(iv), (7 CFR sections 246.2 and 246.7(d)(2)). e. Income Eligibility Determination ? Except for applicants determined to be automatically income-eligible, income is based on gross income and other cash readily available to the family or economic unit. Certain federal payments and benefits, listed at 7 CFR section 246.7(d)(2)(iv)), are excluded from the computation of income. State agencies may instruct local agencies to consider family income over the preceding 12 months or the family?s current rate of income, whichever indicator more accurately reflects the family?s income status. However, applicants in which an adult member is unemployed shall have income determined based on the period of unemployment. A state or local agency may require verification of information which it determines necessary to confirm income eligibility (7 CFR sections 246.7(d)(2)(i) and (v)). f. Nutritional Risk ? A competent professional authority (e.g., physician, nutritionist, registered nurse, or other health professional) must determine that the applicant is at nutritional risk. While the broad guidelines for determining nutritional risk are set forth in WIC legislation and regulations, the specific allowable nutritional risk criteria are defined in WIC policy guidance, which is updated periodically. Each state agency may choose which allowable nutritional risk criteria will be used to determine eligibility. At a minimum, the certifying agency must perform and/or document measurements of each applicant?s height or length and weight. In addition, a hematological test for anemia must be performed or documented at certification if the applicant has no nutritional risk factor prescribed by the state agency other than anemia. Certified applicants with qualifying nutritional risk factors other than anemia must also be tested for anemia within 90 days of the date of certification. Program regulations set several exceptions to these general rules. The determination of nutritional risk may be based on current referral data provided by a competent professional authority who is not on the WIC staff (7 CFR sections 246.2 (definitions of ?competent professional authority? and ?nutritional risk?) and 246.7(e)). When an applicant meets all eligibility criteria, he/she is determined by WIC clinic staff to be eligible for program benefits. Certification periods are assigned to each participant based on categorical status for women, infants, and children (7 CFR section 246.7(g)). A WIC local agency assigns each eligible person a priority classification according to the classification system described in 7 CFR section 246.7(e)(4). A person?s priority assignment reflects the severity of his/her nutritional risk. If the local agency cannot immediately place the person on the program for lack of an available caseload slot, the person is placed on a waiting list. Caseload vacancies are filled from the waiting list in priority classification order. State agencies are expected to target program outreach and caseload management efforts toward persons at greatest nutritional risk (i.e., those in the highest priority classifications). Pregnant women are certified for the duration of their pregnancies and for up to six weeks postpartum. Breast-feeding women may be certified approximately every six months, up to one year postpartum, or until the woman ceases breastfeeding, whichever occurs first (7 CFR section 246.7(g)(1)). Infants are certified at intervals of approximately six months, except that infants under six months of age may be certified for a period extending up to the child?s first birthday, provided the quality and accessibility of health care services are not diminished. Children are certified for six-month intervals ending with the last day of the month in which the child reaches the fifth birthday. State agencies also have the option to certify children for a period of one year if the state agency ensures that the child receives the required health and nutrition assessments (7 CFR section 246.7(g)(1)). Non-breast-feeding women are certified for up to six months postpartum. All categories of participants may be certified up to the last day of the last month of the certification period (7 CFR section 246.7(g)(1)). Condition: Indiana University Health, Inc. and Subsidiaries screen applicants for eligibility by following the state of Indiana guidelines as provided through the Convansys system used to enter, track, and store information about applicants. Based on guidance contained in 7 CFR section 246, states were encouraged to move to a paperless system. Specifically, federal guidance contained in 7 CFR 246.7 (i)(4) and (5)(i) outlines acceptable documentation to be included on certification forms as (1) a description of the document(s) used to determine residency and identity or a copy of the document(s) used or the applicant?s written statement when no documentation exists; and (2) a description of the document(s) used to determine income eligibility or a copy of the document(s) in the file. The state of Indiana has followed that guidance and does not require Indiana University Health, Inc. and Subsidiaries to retain copies of an applicant?s proof of residence, income, etc., regarding eligibility. Therefore, we were not able to test internal controls over compliance or compliance over the eligibility compliance requirement through re-performance and have issued a qualified opinion based on the scope limitations. Cause: Indiana University Health, Inc. and Subsidiaries follow a paperless system as supported by the state of Indiana and the U.S. Department of Agriculture. As such, third-party supporting documentation of eligibility determinations is not retained. Effect or Potential Effect: A scope limitation qualified opinion was issued for CFDA 10.557 as we were unable to obtain sufficient documentation supporting the compliance of Indiana University Health, Inc. and Subsidiaries? eligibility. Questioned Costs: None. Context: Federal expenditures reported in the schedule of expenditures of federal awards for CFDA 10.557 totaled $1,285,571 for the year ended December 31, 2019. Identification as a Repeat Finding, If Applicable: This is a repeat finding. The prior year finding reference is 2018-001. Recommendation: Not practical. Views of responsible officials: As Indiana University Health, Inc. and Subsidiaries follow the State of Indiana?s paperless system as described above, which is also supported by 7 CFR 24, no further corrective action will be taken.

Finding 2019-002 (Cash Management and Allowable Costs/Cost Principles) Information on the federal program: Federal Grantor: Department of Health and Human Services Pass-Through Grantor: Indiana State Department of Health CFDA No.: 93.917, HIV Care Formula Grants Pass-Through Award Number: 24502, amendments #1 and #2 Pass-Through Award Periods: 10/1/2018?9/29/19 and 9/30/19?3/30/20 Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR Section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. The Uniform Guidance 2 CFR section 200.403 contains the factors affecting the allowability of costs and states, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: The federal pass-through program operates on a reimbursement basis. Documentation was not retained to support the amount of cash draws during the year at one hospital that administers the CFDA 93.917 federal program. In addition, reimbursement requests were prepared based on budgeted amounts and not actual expenditures for January 2019 through April 2019. In addition, the final September 2019 claim, which included monthly claims from May 2019 through September 2019 as well as corrections to January 2019 through April 2019, contained errors resulting in amounts being claimed that were not allowable. Cause: Internal controls that Indiana University Health, Inc. and Subsidiaries had in place over the preparation of reimbursement requests for its federal programs were not being followed by one hospital that administered the CFDA 93.917 federal program. Reimbursement requests were prepared based on budgeted amounts and not actual expenditures for January 2019 through April 2019. In addition, the September 2019 claim was reviewed at a high-level but was not reviewed in detail. Effect or potential effect: Cash was drawn in the wrong amount and for unallowable expenditures based on the award. Questioned costs: $193,560 for CFDA 93.917, representing overclaimed payroll, fringe and supplies expenses. Context: In the prior year, one of two hospitals that administered the federal program could not provide adequate support for the amount of cash drawn as management represented amounts requested for cash draws at this hospital during the prior year were based on budgeted amounts and not actual expenditures. The noncompliance also impacted January 2019 through April 2019 as reported here. In addition, the final September 2019 claim included errors as follows: ? When correcting January 2019 through April 2019 expenses, formula errors were made which caused Indiana University Health, Inc. and Subsidiaries to overclaim payroll expenses by $143,736 and supplies expense by $8,000. ? Indiana University Health, Inc. and Subsidiaries overclaimed payroll expense related to one employee by $41,824 (claimed entire cost charged to Indiana University Health, Inc. and Subsidiaries and not the actual time spent on the grant). The errors identified above resulted in Indiana University Health, Inc. and Subsidiaries claiming unallowable expenditures for reimbursement totaling $193,560. Additionally, there were a total of 40 reimbursement requests prepared during fiscal year 2019; seven were from one location totaling $526,261 and 33 from another location totaling $1,048,018. Identification as a repeat finding, if applicable: This is a repeat finding and relates to the prior year finding 2018-002. Recommendation: Indiana University Health, Inc. and Subsidiaries should improve internal controls over the cash management process, which includes timely procedures over preparation, approval (including the review for allowability of expenditures which Indiana University Health, Inc. and Subsidiaries performs at the time a reimbursement request is prepared), and retention of supporting documentation to allow for compliance with the cash management and allowable costs/cost principles compliance requirements. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries agree with the comment and have developed a corrective action plan to address the finding.

Finding 2019-003 (Cash Management) Information on the federal program: Federal Grantor: Department of Health and Human Services Pass-Through Grantor: Indiana Aids Fund CFDA No.: 93.917, HIV Care Formula Grants Pass-Through Award Numbers: 19-1331, 19-1344, and 19-1332 Pass-Through Award Periods: 7/1/2019?9/30/19 (19-1331), 9/26/2019?11/30/19 (19-1344), and 7/1/19?9/30/19 (19-1332) Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: The federal program received advances initiated by the pass-through entity under certain grants during fiscal year 2019. For one hospital that administered the CFDA 93.917 federal program, internal controls were not in place to address the cash management requirements over advances related to 1) minimizing the time elapsing between the transfer of funds by the pass-through entity and disbursement by Indiana University Health, Inc. and Subsidiaries and 2) tracking interest earned on Federal advance payments deposited in interest-bearing accounts to determine if interest in excess of $500 should be remitted to the U.S. Department of Health and Human Services. Cause: The advances were initially determined to be privately-funded. A subsequent determination made in May 2020 after review of the award documents revised the funding source to be federally-funded. As such, internal controls were not in place due to this determination. Effect or potential effect: Advance payments received may not be limited to the minimum amounts needed and may not be timed to be in accordance with the actual, immediate cash requirements of the organization in carrying out the purpose of the approved program or project. Interest earned on advances in excess of $500 may not be returned to the U.S. Department of Health and Human Services as required. Questioned costs: None. Context: Advances initiated by the pass-through entity and received in July 2019 and November 2019 by one hospital that administered the CFDA 93.917 federal program totaled $141,555. The advances were expended between September 2019 and December 2019. The one hospital did not have internal controls in place to ensure the advances received were both timely expended and that any interest earned over $500 was appropriately returned to the U.S. Department of Health and Human Services. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: Indiana University Health, Inc. and Subsidiaries management should implement additional internal controls over the review of award documents at the time of receipt from grantors to ensure they are properly identified as federal when applicable. In addition, Indiana University Health, Inc. and Subsidiaries should ensure that the hospitals in question follow established internal controls over advances, which includes internal controls over monitoring the timeliness of when the advances are expended and the calculation of interest earned on the advances to determine if any excess interest is required to be returned to the U.S. Department of Health and Human Services. Views of responsible officials: Indiana University Health, Inc. and Subsidiaries agree with the comment and have developed a corrective action plan to address the finding.

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