Mahaska County Hospital d/b/a Mahaska HealthLocal Government

Identification of the Federal Program: U.S. Department of Agriculture ? Community Facilities Loans and Grants Cluster, Community Facilities Loans and Grants ? 10.766 Criteria: The Partnership must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Partnership is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the audited financial statements to be provided to the federal agency annually within 150 days of fiscal year-end, as well as quarterly internal financial statements. Condition: The Partnership did not submit the audited financial statements within the prescribed period or request an extension and did not submit any quarterly reports to the federal agency. The Partnership was not asked for the information after they failed to submit it. The audited financial statements are readily available to the federal agency through the federal clearinghouse website. Cause: The Partnership did not provide the required information. Effect: The required reports were not submitted to the federal agency. Questioned Costs: None reported. Context: Sampling was not used. All required reports were tested for compliance. Recommendation: We recommend that management implement procedures to ensure that the required financial reports are submitted in a timely manner in accordance with the terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Identification of the Federal Program: U.S. Department of Agriculture ? Community Facilities Loans and Grants Cluster, Community Facilities Loans and Grants ? 10.766 Criteria: The Partnership must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Partnership is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the Hospital to maintain a debt service reserve fund as bookkeeping accounts or as separate bank accounts. Condition: During 2022, the certificate of deposit that represented the debt service reserve fund matured and the proceeds were commingled with an existing money market fund. Cause: The Partnership did not maintain a separate bank account for the debt service reserve fund. Effect: The debt service reserve funds were commingled with other operating funds within a money market fund. Questioned Costs: None reported. Context: Sampling was not used. Recommendation: We recommend that management maintain a separated bank account for the debt service reserve fund. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.

Finding No. 2021-003 Federal Program: Federal Assistance Listing #93.498 US Department of Health and Human Services COVID-19 - Provider Relief Fund Criteria or Specific Requirement: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 reporting required an organization to illustrate how PRF received between April 10 through June 30, 2020 was used. An organization was allowed to include eligible expenditures from January 1, 2020 through June 30, 2021. Condition: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the coronavirus pandemic, it was noted that management included utility expense for periods prior to January 1, 2020. Cause: Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently included utility expense for periods prior to January 1, 2020. Effect or Potential Effect: Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: Total questioned costs related to Federal Assistance Listing Number 93.498 amounted to $79,758 utility expense for periods prior to January 1, 2020. Context: HRSA guidance for Period 1 reporting indicated expenditures were to be for the period of January 1, 2020 through June 30, 2021. Testing performed over utilities identified $39,915 of expenses expense for periods prior to January 1, 2020. Testing was expanded to all utility expenses claimed in Q1 2020 which identified an additional $39,843 of utility expenses claimed for periods prior to January 1, 2020. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in reporting periods defined by HRSA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the noted finding. However, the Partnership also incurred and reported lost revenue attributable to coronavirus of $2,548,774 which could be used to replace the identified questioned costs. Management will continue to refine its processes to more diligently review expenditures to ensure only those costs incurred during the eligibility period are included in future reporting.