TIOGA MEDICAL CENTERNon-Profit

2021-004 United States Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Assistance Listing #93.155 Rural Health Research Centers 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 Medical Center does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. We were requested to draft 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 the Medical Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Medical Center would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-004 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 Medical Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

2021-004 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 #450308484 Department of Health and Human Services Federal Assistance Listing/CFDA #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Department of Health and Human Services Federal Assistance Listing/CFDA #93.301 COVID-19 Coronavirus State Hospital Improvement Program and Small Rural Hospital Improvement Grant Program Department of Health and Human Services Federal Assistance Listing/CFDA #93.889 COVID-19 National Bioterrorism Hospital Preparedness Program 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 Medical Center does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. We were requested to draft 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 the Medical Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Medical Center would not be able to draft a Schedule that is correct without assistance of 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 management be aware of the financial reporting requirements relating to the Medical 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 Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450308484 Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and 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. The Medical Center claimed expenses based on specifically identified COVID related expenses. Condition: The Medical Center claimed expenses that were reimbursed by other funding sources. These expenses were improperly included within the HHS Special Report ? Period 1 (Report) which caused the Report to be inaccurate. Cause: The Medical Center submitted expenses that were to be reimbursed by other funding sources (i.e., Medicare). The Medical 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. Expenses reported were not reduced by other funding sources. Effect: The lack of adequate policies governing cash disbursements and 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 Medical Center submitted expenses over their actual allowable expenses. Questioned Costs: There are questioned costs of $333,860 (actual) that were reimbursed or will be reimbursed by other funding sources. Context: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $604,592 of $1,548,954 direct program expenditures. Within the $604,592 sample, $132,976 of costs were reimbursed by a different funding source (i.e., Medicare cost reimbursed percentage estimated using the filed cost report for fiscal year 2020). There was also summary level testing completed over $67,678 of claimed expenses and no errors were found. The Report section, Other PRF Expenses, included expenses that were reimbursed or would be reimbursed by other funding sources. Repeat Finding from Prior Years: No Recommendation: We recommend that the Medical 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. We also recommend that the Medical 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.

2021-006 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 #450308484 Activities Allowed or Unallowed and Allowable Costs/Costs Principles 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 Medical Center had various invoices identified as eligible that were not reviewed and approved. In addition, the Medical Center?s final expenditure listing and lost revenue calculation identified as eligible and claimed under the Provider Relief Fund Program did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Cause: The Medical Center did not have an adequate internal control policy in place to ensure review and approval over specifically identified invoices, the final expenditure listing, and the lost revenue calculation. Effect: The lack of adequate policies governing the review and approval of invoices 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 $1,548,954 of the expenses and summary level testing was completed on $67,678 of 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 detailed testing, 29 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). Repeat Finding from Prior Years: No Recommendation: We recommend that the Medical 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 Medical 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. 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 Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #450308484 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 Medical Center selected lost revenue calculation option iii which is the alternative method of calculating lost revenues attributable to coronavirus. Under this methodology, the Medical Center was required to submit a narrative that described the methodology used, why the methodology is reasonable, and a description of how lost revenues were attributable to coronavirus. Cause: The Medical Center did not have a narrative that adequately described the option iii methodology utilized in the lost revenue calculation. Effect: The Medical Center?s narrative did not adequately describe the option iii methodology utilized in the lost revenue calculation as required under the guidance. This did not allow the auditor to audit based on the narrative, but rather, the auditor had to discuss the option iii methodology to obtain additional information to fully understand the alternative method used. Questioned Costs: None reported. Context: The option iii narrative for lost revenue did not include specific details identifying that the long-term care facility decrease in utilization was being used for this calculation. The auditors were able to understand the methodology after having discussions with the Medical Center. Repeat Finding from Prior Years: No Recommendation: We recommend that the Medical Center enhance the option iii narrative for lost revenue calculation by including the specific methodology utilized in the calculation as well as expanding the reasonableness of how the losses were attributable to coronavirus and documenting the timeframe to be utilized in the calculation. Views of Responsible Officials: Management agrees with the finding.