WASHINGTON COUNTY HOSPITAL

2022-004 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Department of Health and Human ServicesFederal Financial Assistance Listing #93.155COVID-19 Rural Health Research CentersPreparation of Schedule of Expenditures of Federal AwardsMaterial Weakness in Internal Control Over Compliance - OtherCriteria: Proper controls over financial reporting include the ability to prepare the Schedule of Expenditures of Federal Awards (Schedule) and accompanying notes to the Schedule.Condition: The Organization does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule.Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures.Effect: There is a reasonable possibility that the Hospital would not be able to draft the Schedule that is correct without the assistance of the auditors.Questioned Costs: None reported.Context: Sampling was not used.Repeat Finding from Prior Years: NoRecommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the internal controls that impact financial reporting.Views of Responsible Officials: Management agrees with the finding.

2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.Condition: The Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.

2022-006 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over ComplianceCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.Condition: There was no evidence of formal review and approval over tracking of expenditures that wereclaimed for the program. In addition, there was no evidence retained that the Hospital?s special reportsubmitted to the Department of Health and Human Services for Period 1 TIN #376020408 was reviewed orapproved by an individual separate from the preparer prior to submission. The approval for individual payroll and fringe benefit expenditures was not retained in the transition to a new payroll software, and certain other expenditures did not have retained approval.Cause: The Hospital did not have an internal control process in place to ensure documentation of review and approval was retained for individual expenditures, the workpaper tracking expenditures claimed under the federal program, and the special report submitted to the Department of Health and Human Services for Period 1.Effect: The lack of adequate policies governing review, approval, and retention of documents increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely.Questioned Costs: None reported.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained.Views of Responsible Officials: Management agrees with the finding.

2022-007 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesSignificant Deficiency in Internal Control Over ComplianceCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.Condition: The Hospital?s final expenditure listing claimed payroll costs by certain departments that worked directly with COVID patients. The general ledger report that this information was generated from reports the information by department, however the payroll register does not have departmental data. Therefore, the general ledger report was not able to tie to specific department information, but it was able to tie in total.Cause: The Hospital had multiple employees working in multiple departments during the periods claimed. The Hospital?s payroll per department was calculated by the payroll system which was subsequently replaced. In the transition to the new software, a payroll register by department that shows the exact allocation of wages to various departments was not retained.Effect: Without a payroll register by department, there is a possibility that ineligible expenditures may be claimed under the program.Questioned Costs: None reported.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that the support of payroll expenditures by department are properly retained.Views of Responsible Officials: Management agrees with the finding.