HUMBOLDT PARK HEALTH, INC. AND SUBSIDIARIESNon-Profit

Assistance Listing Number, Federal Agency, and Program Name - 14.128, U.S. Department of Housing and Urban Development (HUD), Mortgage Insurance Hospitals Federal Award Identification Number and Year - N/A (2021) Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2024-004 Criteria - Per the Consolidated Audit Guide for Audits of HUD Programs Handbook issued by the HUD Office of Inspector General, hospitals are required to submit a budget for the new fiscal year within thirty (30) days of the start of the new fiscal year. Condition - The Organization did not submit the budget to HUD within 30 days of the start of its fiscal year. Questioned Costs - None If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During testing, it was noted that the Organization's budget for the September 30, 2025 fiscal year was not submitted. Cause and Effect - The lack of effective internal controls over budget reporting resulted in the untimely submission of the budget. Recommendation - We recommend that the Organization implement internal controls to ensure that the budget is submitted timely within the deadline. Views of Responsible Officials and Planned Corrective Actions - Management has implemented a new review and oversight process related to the process for the budget submissions in question to ensure timely submission on a go forward basis.

Assistance Listing Number, Federal Agency, and Program Name - 14.128, U.S. Department of Housing and Urban Development (HUD), Mortgage Insurance Hospitals Federal Award Identification Number and Year - N/A (2021) Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes 2024-005 Criteria - Per 2 CFR 200.303, the recipient must 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 (COSO). Condition - Controls were not designed or implemented effectively to ensure the following: a) mortgage and escrow payments were made in accordance with the due dates and amounts specified in the executed mortgage note agreement. b) earnings are retained in the replacement reserve account. c) the Organization completes the required financial reports in accordance with the applicable accounting basis, supported by underlying records representing the activity for the period reported. Questioned Costs - None If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - While gaining an understanding of management's processes and internal controls to ensure compliance with the areas noted above, we noted no effectively designed control in place to ensure compliance. Cause and Effect - Though noncompliance was not identified, a lack of internal controls could result in noncompliance with program requirements. Recommendation - We recommend that management design and implement internal controls to ensure compliance with mortgage escrow payments, reserve account funding, and quarterly financial reporting requirements. Views of Responsible Officials and Corrective Action Plan - Management will design and implement internal controls to ensure compliance with mortgage escrow payments, reserve account funding, and quarterly financial reporting requirements, including a process to ensure that documentation of reviews is retained.

Assistance Listing Number, Federal Agency, and Program Name - 14.128, U.S. Department of Housing and Urban Development (HUD), Mortgage Insurance Hospitals Federal Award Identification Number and Year - N/A (2021) Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2023-006 Criteria - Per the Consolidated Audit Guide for Audits of HUD Programs Handbook issued by the HUD Office of Inspector General, hospitals are required to submit a budget for the new fiscal year within thirty (30) days of the start of the new fiscal year. Condition - The Organization did not submit the budget to HUD within 30 days of the start of its fiscal year. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During testing, it was noted that the Organization's budget for the September 30, 2024 fiscal year was not submitted. Cause and Effect - A lack of effective internal controls over budget reporting resulted in the untimely submission of the budget. Recommendation - We recommend that the Organization implement internal controls to ensure that the budget is submitted timely within the deadline. Views of Responsible Officials and Planned Corrective Actions - Management has implemented a new review and oversight process related to the process for the budget submissions in question to ensure timely submission on a go forward basis.

Assistance Listing Number, Federal Agency, and Program Name - 14.128, U.S. Department of Housing and Urban Development (HUD), Mortgage Insurance Hospitals Federal Award Identification Number and Year - N/A (2021) Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must 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 (COSO). Condition - Controls were not designed or implemented effectively to ensure the following: a) mortgage and escrow payments were made in accordance with the due dates and amounts specified in the executed mortgage note agreement. b) earnings are retained in the replacement reserve account. c) the Organization completes the required financial reports in accordance with the applicable accounting basis, supported by underlying records representing the activity for the period reported. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - While gaining an understanding of management's processes and internal controls to ensure compliance with the areas noted above, we noted no effectively designed control in place to ensure compliance. Cause and Effect - Though noncompliance was not identified, a lack of internal controls could result in noncompliance with program requirements. Recommendation - We recommend that management design and implement internal controls to ensure compliance with mortgage escrow payments, reserve account funding, and quarterly financial reporting requirements. Views of Responsible Officials and Corrective Action Plan - Management will design and implement internal controls to ensure compliance with mortgage escrow payments, reserve account funding, and quarterly financial reporting requirements, including a process to ensure that documentation of reviews is retained.

Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - 38080710K, 2022 Pass-through Entity - Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must 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 (COSO). Per 2 CFR 200.403, except where otherwise authorized by statute, in order to be allowable under Federal awards, costs must be determined in accordance with generally accepted accounting principles (GAAP), incurred during the approved budget period, and adequately documented. Per 2 CFR 200.510, the auditee must prepare a schedule of federal expenditures (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. Per 2 CFR 200.328, the funding agency establishes the financial reporting basis of accounting. Based on the reimbursement certificate template required by the passthrough funding agency, the recipient should report expenditures from expense activity, as well as cash or in-kind matching contributions where applicable. Condition - Management lacked adequate controls at the transaction level to ensure compliance with activities allowed or unallowed, allowable cost principles, and period of performance, which resulted in the improper inclusion of duplicate costs and costs from a prior fiscal period. Further, a lack of effective controls over financial reporting and over preparation of the SEFA resulted in management reporting activity on a cash basis, inconsistent with the basis of reporting established in Note 1 and with requirements established by the passthrough funding agency. Questioned Costs - $109,149 If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - Questioned costs totaling $49,754 represent a duplicate invoice found as the result of compliance testing. An additional $59,395 of costs were identified during compliance testing from invoices for goods or services received during fiscal year 2022. Context - During a walkthrough of management's processes and controls, we noted management did not have controls in place at the invoice level for 2 of the 3 vendors charged to the program during the fiscal period under audit to ensure compliance with activities allowed or unallowed, allowable cost principles, or period of performance. As the result of compliance testing, we identified 1 invoice in the amount of $49,754 out of 60 samples that was a duplicate transaction of another sample. As the result of compliance testing, we identified 7 out of 60 transactions totaling $59,395 incurred during the fiscal year ended September 30, 2022. Through discussions with management and in an effort to reconcile the SEFA to underlying general ledger expenditure activity incurred during the fiscal period under audit, we noted that the amount on the SEFA reflected cash reimbursed by IDPH and not expenditures incurred during the fiscal period. In addition, for 2 of the 4 quarterly financial reports selected for testing, we noted that amounts requested for reimbursement for those periods were overstated by approximately $217,000 in aggregate, in relation to the underlying expenditure activity incurred at the time of the submission of the financial report to and request for reimbursement from IDPH. Cause and Effect - A lack of effective controls over the preparation of the SEFA could result in material inaccuracies to the SEFA. A lack of effective controls at the transaction level resulted in noncompliance with accounting principles, duplicate charges to the program, and questioned costs. A lack of effective controls over financial reporting resulted in noncompliance with reporting requirements and an inaccurate reflection of activity incurred during the period reported. Recommendation - We recommend management implement effective controls at the transaction level to ensure costs are allowable under the terms and conditions of the grant agreement have not been duplicated within the population of costs charged to the program and are in compliance with cost principles outlined within the Uniform Guidance. In addition, we recommend that management review the Uniform Guidance and grant agreements carefully to understand the required basis of accounting and to implement an effective set of controls to ensure compliance with these requirements. Views of Responsible Officials and Corrective Action Plan - Management has implemented a new review and oversight process related to the process for the grant submissions in question.

Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - 38080710K, 2022 Pass-through Entity - Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must 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 (COSO). Per 2 CFR 200.318(a), the non-Federal entity must have an use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §200.317 through §200.327. Per 2 CFR 200.318(h), the non-Federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, 2 CFR 200.214 restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition - Controls were not sufficient to ensure that management has written policies and procedures surrounding procurement that align with Federal Procurement Standards outlined within the Uniform Guidance. Further, controls were not adequate to ensure that the history of procurement decisions was documented. Additionally, controls were not sufficient to ensure checks for suspension and debarment were performed and documented before entering into a covered transaction with third parties. Questioned Costs - $3,000,000 If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - Questioned costs represent procured contractor activity reported on the SEFA not in compliance with Federal procurement standards. Context - Through review of management's various policies and procedures in place related to purchasing, we noted that management does not have policies and procedures in place that align with the federal procurements standards under §200.317 through §200.327 to ensure compliance with these standards. Further, while testing a sample of 2 contracts out of 3 vendors with activity on the SEFA, we noted no documented evidence of the history of procurement, rationale for the method of procurement used, selection of the contract type, basis for contract selection, analysis of cost or price, or checks for suspension and debarment. Cause and Effect - A lack of written policies and procedures has resulted in material noncompliance with federal procurement standards, including standards to ensure checks for suspension and debarment are performed before entering into a covered transaction with third parties. Recommendation - We recommend management implement written policies and procedures, as required by the Uniform Guidance, to ensure compliance with the federal procurement standards under §200.317 through §200.327 of the Uniform Guidance. We also recommend management implement a system of internal controls to ensure procurement decisions are documented, including checks for suspension and debarment to ensure compliance with §200.214. Views of Responsible Officials and Planned Corrective Actions - The Organization will update and formally adopt written procurement, suspension, and debarment policies and procedures to conform to Uniform Guidance requirements and implement procedures to ensure those policies are consistently followed and documented for all federally funded procurements.

Assistance Listing, Federal Agency, and Program Name - 14.128, U.S. Department of Housing and Urban Development (HUD), Mortgage Insurance Hospitals Federal Award Identification Number and Year - N/A (2021) Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per the Consolidated Audit Guide for Audits of HUD Programs Handbook issued by the HUD Office of Inspector General, hospitals are required to submit a budget for the new fiscal year within thirty (30) days of the start of the new fiscal year. Condition - The Organization did not submit the budget to HUD within 30 days of the start of its fiscal year. Questioned Costs - N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During our testing, it was noted that the Organization's budget for the September 30, 2023 fiscal year was not submitted. Cause and Effect - The lack of effective controls over budget reporting resulted in the untimely submission of the budget. Recommendation - We recommend that the Organization implement internal controls to ensure that the budget is submitted timely within the deadline. Views of Responsible Officials and Planned Corrective Actions - Management has implemented a new review and oversight process related to the process for the budget submissions in question to ensure timely submission on a go-forward basis.

Assistance Listing, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services (HHS), COVID-19: Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Federal Award Identification Number and Year N/A Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per the Phase 2 General Distribution Relief Fund Payment Terms and Conditions, recipients shall maintain appropriate records and cost documentation, as outlined in the terms and conditions of the funding received. The terms and conditions require that the funding recipient retain proper documentation for the expenses submitted within the HRSA portal. Condition The Organization’s lacked effective controls to ensure documentation for expenses reported within the Organization’s period 2 portal submission were retained. The Organization was able to produce documentation for total expenses of $7,516,920, while the Organization had reporting to HRSA that it had incurred $8,509,978 of expenses. As a result, the Organization was unable to provide support for $993,058 of the total expenses reported. Questioned Costs $993,058 Identification of How Questioned Costs Were Computed Questioned costs were computed by taking total expenses reported per the Organization’s period 2 portal submission of $8,509,978, as compared to the total expenses the Organization could support, per internal documentation, which totaled $7,516,920. Context The single audit for the Organization included expenses reported during the first quarter of calendar year 2020 through the fourth quarter of calendar year 2021 related to funding received in Period 2. As a result of the funding received, the Organization was required to attest to the applicable expenses incurred, which are defined by HHS. The Organization was not able to reproduce listings that agreed to the total expenses reported in the period 2 portal submission. In particular, support for various allocations made reflecting qualified expenses were not retained. Due to this, the Organization reported $993,058.38 of expenses in the Organization’s Period 2 portal submission for which the Organization could not support. Cause and Effect Appropriate review and retention of support for expense allocations made, which validated portions of the total expenses reported in the Organization’s portal submissions, was not complete to ensure the reports followed required retention guidelines. As a result, the Organization was not able to provide support for expenses reported in it's period 2 portal submission. Recommendation We recommended that the Organization implement controls, including levels of review and document retention, to ensure that reports are completed and submitted in accordance with the guidelines established by HHS. Views of Responsible Officials and Corrective Action Plan The Organization will review its processes surrounding the retention of documentation used to report expenses and will implement additional levels of review to ensure that the proper documentation is retained for future reporting period portal submissions.

Assistance Listing, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services (HHS), COVID-19: Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Federal Award Identification Number and Year N/A Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per the Provider Relief Fund General and Targeted Distribution Post-Payment Notice of Reporting Requirements dated April 7, 2023, recipients must meet compliance with reporting requirements, as outlined in the terms and conditions of the funding received. The terms and conditions require that the funding recipient report accurate expense totals to support the funding received. Condition The Organization’s controls in place for reporting submissions did not identify that the General and Targeted Distribution Post-Payment Notice of Reporting Requirements guidelines were not followed related to expense amounts reported in the Organization’s period 2 portal submissions. Questioned Costs $15,062 Identification of How Questioned Costs Were Computed Amounts were obtained by taking the difference between the actual expense totals per vendor invoices as compared to amounts included in client's calculation of allowable costs. Context The single audit for the Organization included expenses reported during the first quarter of calendar year 2020 through the fourth quarter of calendar year 2021 related to funding received in Period 2. As a result of the funding received, the Organization was required to attest to the applicable expenses incurred, which are defined by HHS. Upon review, it was identified that a clerical error was made in the calculation of certain expenses reported by the Organization. Due to this, the Organization reported expenses in excess of the expenses incurred in the Organization’s Period 2 portal submission. Cause and Effect Appropriate review of the expenses reported was not completed to ensure the expenses reported were accurate. As a result, the Organization reported incorrect expense totals for the period 2 portal submission. Recommendation We recommended that the Organization implement controls, including levels of review, to ensure that reported expenses comply with the guidelines established by HHS. Views of Responsible Officials and Planned Corrective Actions The Organization will review its processes surrounding the quantification of expenses reported and will implement additional levels of review to ensure that the expense amounts are validated for future reporting periods.