P. R. HEALTH CORPORATIONNon-Profit

2023‐003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions 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 award that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and conditions of the federal awards. Condition: During our testing, there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program. Cause: The Health Center did not have an adequate internal control policy in place to ensure review and approval over the reserve fund. Effect: The lack of adequate policies governing review 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/Sampling: Sampling was not used. The Health Center has two required reserve accounts that were tested. Repeat Finding from Prior Years: Yes, prior year finding 2022‐004 Recommendation: We recommend that the Health Center enhance internal control policies to ensure that formal documentation of reviews is present. Views of Responsible Officials: Management agrees with the finding.

2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions 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 award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal awards. Condition During our testing, there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program. Cause The Home did not have an adequate internal control policy in place to ensure review and approval over the reserve fund. Effect The lack of adequate policies governing review 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/Sampling Sampling was not used. The Health Center has two required reserve accounts that were tested. Repeat Finding from Prior Years No Recommendation We recommend that the Health Center enhance internal control policies to ensure that formal documentation of reviews is present. Views of Responsible Officials Management agrees with the finding.

2021-004 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450232743 Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance ? Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Health Center does not have an internal control system designed to allow for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule as unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility the Health Center would not be able to draft a Schedule that is correct without assistance from the auditors. 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 that management be aware of the financial reporting requirements relating to the Health Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2021-005 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450232743 Activities Allowed or Unallowed, Allowable Costs/Costs 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 Health Center had various invoices identified as eligible that were not reviewed and approved. In addition, the Health Center?s final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund Program, and special report submitted to the Department of Health and Human Services for Period 1 did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Cause: The Health Center did not have an adequate internal control policy in place to ensure review and approval over specifically identified invoices, the final expenditure listing, the lost revenue calculation, or preparation of HHS Period 1 reporting were documented. Effect: The lack of adequate policies governing the review and approval of invoices, expenditure listing, lost revenue calculation and the HHS Period 1 report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program. Questioned Costs: None reported. Context: Detail testing was completed over $3,505,815 of the expenses along with the calculation for lost revenue for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 65 expenditures were selected for testing, 61 of the expenditures did not have evidence of being reviewed and approved. The overall expense worksheet and lost revenue worksheet did not have evidence of a review by someone other than the preparer (.i.e., population of two). In addition, the Report submitted to HHS did not have a documented secondary review and approval. Repeat Finding from Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure all invoices are reviewed and approved to ensure all expenses claimed under the federal program are necessary, correct, and meet the requirements of the federal program. We also recommend the Health Center implement a control process which includes a secondary review and approval of the final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and that there is documented evidence of the review and approval. In addition, the special Reports submitted to HHS should have a secondary review and approval that is documented. Views of Responsible Officials: Management agrees with the finding.

2021-006 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450232743 Allowed or Unallowed, Allowable Costs/Costs Principles Material Weakness in Internal Control Over Compliance and Noncompliance 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 Health Center claimed expenses based on specifically identified COVID related expenses. Condition: The Health Center claimed expense that were reimbursed by other funding sources. These expenses were improperly included within the HHS Special Report which caused the Report to be inaccurate. Cause: The Health Center submitted expenses that were to be reimbursed by other funding sources (i.e., Medicare and other grant). The Health Center did not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs were documented and to ensure that expenses claimed in the Report were complete and accurate. Effect: The lack of adequate policies governing cash disbursements and preparation and submission of the Report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Health Center submitted expenses over their actual allowable expenses. Questioned Costs: There are no questioned costs as there is enough excess lost revenue to cover the differences. Context: A nonstatistical sample of 65 expenditures were selected for testing, which account for $702,631 of $3,505,815 direct program expenditures. Within the $702,631 sample, $86,982 of costs were reimbursed by a different funding sources (i.e., Medicare cost reimbursed). There was also a $46,415 difference in the listing of expenses due to the Health Center including expenditures that were reimbursed under another grant. Repeat Finding from Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Report required to be submitted to the federal agency. We also recommend the Health Center enhance internal control policies to ensure that the required Reports are properly reviewed prior to submission to ensure all key line items 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.

2021-007 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450232743 Activities Allowed or Unallowed, Allowable Costs/Costs Principles Material Weakness in Internal Control Over Compliance and Noncompliance 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 Health Center claimed expenditures based on a lost revenue calculation. Condition: The Health Center utilized option i to calculate lost revenue which is the actual-to-actual methodology of calculating lost revenues attributable to coronavirus. The Health Center did not incorporate audit adjustments of $355,953 in their internal financials for 2019, audit adjustments of $1,508,427 in their internal financials for 2020, and audit adjustments of $732,353 in their internal financials for 2021. These audit adjustments increased the Health Center?s revenue. In addition, the Health Center did not incorporate bad debt expense in their internal financials for 2020 which decreased their revenue by $489,299. Cause: These errors noted indicate there is a lack of adequate policies governing the review and approval of the lost revenue calculation and the HHS Period 1 report. Effect: The errors identified in the lost revenue calculation above resulted in the lost revenue reported on the HHS Report to be overstated by $71,316. While the amount of lost revenue decreased, the Health Center has excess lost revenue to carry over. These errors noted indicate there is a lack of adequate policies governing the review and approval of the lost revenue calculation and the HHS Period 1 report. Without a secondary review and approval, there is a possibility that these errors can occur. Questioned Costs: There are no questioned costs as there is enough excess lost revenue to cover the differences. Context: The option i lost revenue calculation did not incorporate audit adjustments for 2019, 2020, and 2021. In addition, the lost revenue calculation did not include bad debt expense for 2020. The corrected revenue amounts resulted in a reduction of lost revenue claimed of $71,316. Repeat Finding from Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure the lost revenue calculation is supported by internal financials. This would include implementing a secondary review and approval over the final lost revenue calculation. Views of Responsible Officials: Management agrees with the finding.

2021-008 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450232743 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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 Health Center claimed lost revenues and expenses that were incorrectly calculated or not supported. These were improperly included with the Report and caused to the Report to be inaccurate. Cause: The Health Center submitted expenses that were to be reimbursed by other funding sources (Medicare and other grants). The Health Center claimed lost revenue under option i that did not incorporate material audit adjustments for 2019, 2020, and 2021 as well as bad debt expense for 2020. Effect: The lack of adequate policies over the Report preparation and submission increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Health Center submitted expenses over their actual allowable expenses. Questioned Costs: There are no questioned costs as there is enough excess lost revenue to cover the expense differences (see Findings 2021-006 and 2021-007). Context: The Report section, Other PRF Expenses, included expenses that were claimed by other sources (see Finding 2021- 006). The Report section, Lost Revenues, included lost revenue calculations that were incorrect (see Finding 2021-007). Repeat Finding from Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the reports required to be submitted to the federal agency and to ensure the appropriate lost revenue amounts are reported. We also recommend that the Health Center enhance internal control policies to ensure that the required reports are properly reviewed prior to submission to ensure all key line items 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.