TOWNER COUNTY MEDICAL CENTER

2021-005 Department 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 #450425948 Activities Allowed or Unallowed and Allowable Costs/Cost Principles, 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 Organization?s final expenditure listing, which included summary level and detailed level of expenses, identified as eligible and claimed under the Provider Relief Fund Program were not reviewed and approved by a separate individual outside of the preparer. The Organization?s calculation of lost revenue claimed contained no formal review of approval by a separate individual outside of the preparer. In addition, there was also no evidence retained that the Organization?s special reports submitted to the Department of Health and Human Services for Period 1 was reviewed and approved by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval of the expenses, lost revenue, and reporting was documented. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures, including lost revenue, may be claimed under the program and the report may not be accurately completed or expenses could be claimed under duplicate grant programs. Questioned Costs: None reported. Context: Detail testing and summary level testing was performed over eligible expenditures for activities allowed and unallowable and allowable cost/cost principles. In addition, the lost revenue calculation for all applicable quarters was tested. 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 the Organization implement a control process which includes a documented secondary review and approval of the final expenditure listing and calculation of lost revenue used to claim allowable costs under the federal program and a documented secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

Finding 2021-005 Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution CFDA #93.498 Finding Summary: There was no review and approval by a separate individual outside of the preparer over the final expenditure listing, lost revenue calculation, and the special report submitted to the Department of Health and Human Services. Responsible Individuals: Tammy Larson, CFO Corrective Action Plan: There will be a secondary review and approval by a separate individual outside of the preparer over the final expenditure listing, lost revenue calculation, and the special report submitted to the Department of Health and Human Services. The secondary reviews and approvals will be documented and recorded. This will be included in the accountant journal entry policy guidelines. Anticipated Completion Date: October 31, 2022