DICKINSON COUNTY HEALTHCARE SYSTEM

2021-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control over Compliance ? Other Criteria ? Title 2 Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the Healthcare System to prepare a schedule of expenditures of federal awards (Schedule). 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition ? The Healthcare System does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to assist in drafting 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 Healthcare System meets a specified threshold of federal expenditures. Effect ? There is a reasonable possibility the Healthcare System would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs ? None reported. Context ? Sampling was not used. Repeat Finding from Prior Year ? No. Recommendation ? While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the reporting requirements relating to the Healthcare System?s schedule of expenditures of federal awards and internal controls that impact reporting. Views of Responsible Officials ? Management agrees with the finding.

2021-004 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control over Compliance Criteria ?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 Healthcare System?s final expenditure listing and lost revenue calculation identified as eligible and claimed under the Provider Relief Fund Program were not reviewed and approved by a separate individual outside of the preparer. In addition, there was also no evidence retained that the Healthcare System?s special reports submitted to the Department of Health and Human Services for Period 1 and 2 were reviewed and approved by a separate individual outside of the preparer. Cause ? The Healthcare System did not have an adequate internal control policy in place to ensure review and approval of the expenses, lost revenue calculation, and reporting were documented. Effect ? Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed or expenses could be claimed under duplicate grant programs. Questioned Costs ? None reported. Context ? Detail testing was performed over eligible expenditures for activities allowed and unallowed and allowable cost/cost principles. In addition, the lost revenue calculation for all applicable quarters was tested. Key line items were tested on the Period 1 and 2 Department of Health and Human Services special report. Repeat Finding from Prior Year ? No Recommendation ? We recommend the Healthcare System implement a control process which includes a documented secondary review and approval of the final expenditure listing and calculation of lost revenues used to claim allowable costs under the federal program and documented secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials ? Management agrees with the finding.

2021-005 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Activities Allowed or Unallowed, Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria ?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 Healthcare System had one selection identified as eligible under the COVID-19 Testing and Mitigation for Rural Health Clinics that did not have a supporting invoice attached. Cause ? The Healthcare System did not have an adequate internal control policy in place to ensure the supporting invoice was maintained with the issued check. Effect ? The lack of adequate policies governing review and approval of expenditures increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs ? None reported. Context ? Detail testing was performed over $172,520 of the expenses for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 60 expenditures out of a population greater than 250 transactions were selected for detailed testing. As noted above, one of the selections did not include invoice support for the check issued. Repeat Finding from Prior Year ? No Recommendation ? We recommend the Healthcare System implement a control process which includes ensuring that supporting invoices are maintained with the check issued to support amounts claimed. Views of Responsible Officials ? Management agrees with the finding.