St. Francis Health Services of Morris Inc.Non-Profit

Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year – Period 4 TIN #203367397, Period 4 TIN #411668347, Period 4 TIN #411879639, Period 4 TIN #411799268, Period 4 TIN #200100365, Period 4 TIN #411810369, Period 4 TIN #463626109, Period 4 TIN #205617275, Period 4 TIN #202581924, Period 4 TIN #411843283, Period 4 TIN #237625632, Period 4 TIN #510487275, Period 4 #411598442, and Period 5 TIN #810910949. Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include the ability to prepare the consolidated schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: St. Francis does not have an internal control system to provide for a complete and accurate Schedule being audited. As auditors, we assisted with the preparation of 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 St. Francis meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that St. Francis would not be able to draft the Schedule that is correct without the assistance of the auditors. 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 St. Francis’ Schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2021-002 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution (ARP) Applicable Federal Award Number and Year ? Period 1 TIN #203367397, Period 1 TIN #411668347, Period 1 TIN #411879639, Period 1 TIN #411799268, Period 1 TIN #200100365, Period 1 TIN #411810369, Period 1 TIN #810910949, Period 1 TIN #463626109, Period 1 TIN #205617275, Period 1 TIN #202581924, Period 1 TIN #411843283, Period 1 TIN #237625632, and Period 1 TIN #510487275. 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 federal awards that provides reasonable assurance that St. Francis is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition: St. Francis? lost revenue calculation and special reports submitted to the Department of Health and Human Services for Period 1 were not reviewed and approved by a separate individual outside of the preparer. Cause: St. Francis did not have an adequate internal control policy in place to ensure review and approval of the lost revenue calculation and report submitted to the Department of Health and Human Services for Period 1. Effect: The lack of adequate policies governing review and approval 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: Key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend St. Francis implement a control process which includes a secondary review and approval of required reports. Views of Responsible Officials: Management agrees with the finding.