HUMAN SERVICES BOARD SERVING NORTH CENTRAL HEALTH CARE FACILITY

U.S Department of Treasury Finding 2022.001 CFDA# 21.027 - Coronavirus State and Local Fiscal Recovery Fund Compliance Requirement - Procurement Condition: NCHC did not have adequate procurement policies in effect that meet the minimum federal requirements for procurement standards. Criteria: Under Uniform Guidance, NCHC is required to implement certain written procurement policies that adhere to the minimum federal requirements as outlined at 2 CFR 200.318 through 200.327. Context: During the audit, it was determined that NCHC's procurement policies did not meet minimum federal requirements. Cause: NCHC did not have adequate procurement policies in effect that meet the minimum federal requirements. Effect: NCHC was not in compliance with 2 CFR 200.318 through 200.327 and as a result did not perform proper procurement procedures over all transactions. Recommendations: We recommend NCHC implement policies and procedures that adhere to the minimum procurement requirements as outlined in federal procurement standards 2 CFR 200.318 through 200.327. View of Responsible NCHC will implement policies and procedures to ensure compliance with the Officials: requirements as outlined in 2 CFR 200.318 through 200.327.

Finding 2021.002 Program Name/Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance and Internal Control, Significant Deficiency Compliance Requirement: Allowable Costs Condition: NCHC is required to use the Provider Relief Funds to prevent, prepare for, and respond to coronavirus and to maintain documentation that supports that payments to reimburse NCHC were for healthcare-related expenses attributable to coronavirus or lost revenues. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus. Per the terms and conditions of the Provider Relief Fund, all records pertaining to expenditures under the Provider Relief Fund are required to be maintained for three years from the date of the final expenditure. Context: NCHC did not retain supporting documentation for certain average hourly rates and hours used to develop certain estimates of allowable cost claimed for HHS Provider Relief Fund reporting. Cause: The Chief Financial Officer, who prepared the estimates of allowable cost claimed for HHS Provider Relief Fund reporting, resigned from NCHC in March 2022 and did not retain adequate documentation to support the average hourly rates and hours used in certain estimates of allowable costs claimed for Provider Relief Fund reporting. Effect: The auditor was unable to verify the accuracy of certain average hourly rates and hours estimates used by NCHC in calculating allowable expense. As a result, NCHC was not in compliance with the terms and conditions of the Provider Relief Fund regarding maintaining records to support Provider Relief Fund expenditures. Because NCHC had additional unreimbursed COVID expenditures and lost revenues, no funds are estimated to be due back to the HHS Provider Relief Fund program as a result of these documentation matters. Recommendation: We recommend management maintain support for average hourly rates and hours used in estimates of allowable expenses reported as allowable expenses for the HHS Provider Relief Fund. View of Responsible Management agrees with the finding and recommendation and will ensure supporting Officials: documentation is maintained to support amounts reported as allowable expenses for the HHS Provider Relief Fund.

Finding 2021.003 Program Name/Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance and Internal Control, Significant Deficiency Compliance Requirement: Allowable Costs Condition: NCHC is required to use the Provider Relief Funds to prevent, prepare for, and respond to coronavirus and to maintain documentation that supports that payments to reimburse NCHC were for healthcare-related expenses attributable to coronavirus or lost revenues. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus. PRF payment amounts (excluding Nursing Home Infection Control Distribution payments) may be applied to patient care lost revenues. ?Patient care? means healthcare, services and supports, as provided in a medical setting, at home/telehealth, or in the community. The following items are not considered patient care: insurance, non-patient care dining services, fundraising events, prescription sales revenues, grants or tuition, retail, auxiliary, parking services, or any gains and/or losses on investments. Context: Revenue reported in the HHS Provider Relief Fund portal for Lincoln County Pine Crest nursing home (TIN# 396005714) included amounts not related to nursing home patient care. Cause: Management did not appropriately evaluate revenue in order to ensure that only revenue related to nursing home patient care was reported in the HHS Provider Relief fund portal. Effect: Lost revenue reported in the HHS Provider Relief fund portal was overstated by $1,768,273 for the years ended December 31, 2021 and 2020. Because NCHC had COVID expenditures and lost revenue in excess of HHS PRF Funding received, no funds are estimated to be due back to the funding source as a result of the overstatement of lost revenue. Recommendation: We recommend management review HHS Provider Relief fund lost revenue guidance and ensure future reporting adheres to the guidance. View of Responsible Management agrees with the finding and recommendation and will ensure ensure future Officials: reporting adheres to the guidance.