Tomah Memorial Hospital, Inc.Non-Profit

Finding 2021-001 Department of Health and Human Services CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #390799566 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting 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 Hospital?s final expenditure listing identified as eligible and claimed under the Provider Relief Fund program was not reviewed and approved by a separate individual outside of the preparer. In addition, the Hospital?s special report submitted to the Department of Health and Human Services )HHS) for Period 1 TIN #390799566 was not reviewed and approved by a separate individual outside of the preparer. Cause: The Hospital had multiple individuals identifying and compiling eligible costs; however, the Hospital did not have an internal control process in place to ensure a secondary review and approval of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing was formally documented. The summary spreadsheet was used to claim allowable costs under the federal program. In addition, the review and approval of the report submitted to HHS for Period 1 was not performed by someone other than the preparer of the report. 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. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 11 ($55,631) out of 41 expenditures ($290,703) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the Period 1 HHS special report. Repeat Finding from Prior Year: No Recommendation: We recommend the Hospital implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

2021-002 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #390799566 Activities Allowed or Unallowed and 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. The Hospital claimed expenses based on specifically identified COVID-related expenses. Condition: The Hospital incorrectly calculated expenses that did not tie to supporting documentation. Cause: The Hospital did not have an adequate internal control policy in place to ensure a secondary review of manual calculations of expenses. The Hospital calculated the cost of certain lab expenses related to coronavirus based on a cost per test completed. In some instances, the cost per test was not calculated correctly. Effect: The Hospital incorrectly calculated the amount of certain expenses reported. Questioned Costs: None reported. Context: A nonstatistical sample of 11 out of 41 ($290,703) direct program expenditures were tested for activities allowed or unallowed and allowable costs/cost principles. Of these 11 items, there were errors in 4 of the expenditures tested due to errors in calculating the cost per test. Repeat Finding from Prior Years: No Recommendation: We recommend that the Hospital enhance internal control policies to ensure all cash disbursements are reviewed and approved prior to payment to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

2021-003 Department of Health and Human Services Federal Assistance Listing/CFDA #93.301 Small Rural Hospital Improvement Grant Program Applicable Federal Award Number and Year ? 2021 TIN #390799566 Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (the Schedule) and accompanying notes to the Schedule. Condition: The Hospital does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. Cause: The Hospital did not have an adequate internal control policy in place to ensure a secondary review of the Schedule being audited. Effect: The Hospital incorrectly excluded a grant from the Schedule. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: 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.