PLATTE COMMUNITY MEMORIAL HOSPITAL, INC.Non-Profit

Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants – Guaranteed Loan Special Test and Provisions 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. The commitment letter for the term loan with the bank requires debt service coverage ratio and working capital to be calculated yearly using audited financial statements. Condition: As of June 30, 2025, management did not perform the proper calculations for the debt service coverage ratio in accordance with the commitment letter. Additionally, the required debt service coverage ratio and required working capital amount were not presented to the board to ensure compliance is obtained. Cause: The Health Center did not have the proper understanding of the calculation for the annual debt service coverage ratio as of year‐end. Additionally, the covenant requirements were not presented to the board to ensure compliance is obtained. The board may be unaware of the covenant requirements identified within the commitment letter. Effect: The Health Center had errors in the calculation and may be in violation of the debt service coverage ratio and working capital requirements if calculations are not performed properly and the covenant requirements are not presented alongside the calculations to ensure compliance. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: Yes, similar Finding 2024‐003 Recommendation: We recommend management use the formulas prescribed by the commitment letter to calculate the debt service coverage ratio and working capital amount and present these alongside the covenant requirements as a part of their year‐end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.

Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants – Guaranteed Loan Special Test and Provisions 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. The commitment letter for the term loan with the bank requires debt service coverage ratio and working capital to be calculated yearly using audited financial statements. Condition: Management does not have a formally documented review and approval process in place to ensure compliance with the debt service coverage ratio and working capital calculations. Cause: The Health Center calculated the annual debt service coverage ratio as of year‐end and the year‐end financial statements provided the current assets and current liabilities for the working capital calculation; however, there was no formally documented review and approval in place. Effect: The Health Center may have errors in the calculations or be in violation of the debt service coverage ratio and working capital requirements if there is no formal documented review or approval. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: Yes, similar Finding 2023‐003 Recommendation: We recommend management implement a formal documented review and approval process to monitor the debt service coverage ratio and working capital as a part of their year‐end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.

2023-003 United States Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Test 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 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 commitment letter for the term loan with the bank requires debt service coverage ratio and working capital calculations to be calculated yearly using audited financial statements. Condition: Management does not have controls in place to ensure compliance with the requirements as they have not been calculating or monitoring the required ratios internally. Cause: The Health Center was relying on the annual calculations performed by the audit team. Effect: The Health Center could be in violation of the debt coverage ratio and working capital requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used Repeat Finding from Prior Year: Yes, Finding 2022-003 Recommendation: We recommend management implement processes and controls to monitor the debt service coverage ratio and working capital calculations as a part of their year-end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.

2022-003 Department of Agriculture Federal Financial Assistance Listing/CFDA #10.766 Communities Facilities and Loans Grants Cluster Special Test 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 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 commitment letter for the term load with the bank requires debt service coverage ratio and working capital calculations to be calculated yearly using audited financial statements Condition: Management does not have controls in place to ensure compliance with the requirements as they have not been calculating or monitoring the required ratios internally. Cause: The Health Center was relying on the annual calculations performed by the audit team. Effect: The Health Center could be in violation of the debt coverage requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used Repeat Finding from Prior Year: No Recommendation: We recommend management implement process and controls in place to monitor the debt service coverage ratio and working capital calculations as a part of their year-end close process to ensure all covenants of the loan are met. Response: Management agrees with the finding.

2021-003 Department of Health and Human ServicesFederal Assistance Listing/CFDA #93.498COVID-19 Provider Relief Fund and American Rescue PlanApplicable Federal Award Number and Year ? Period 1 TIN #460239781Preparation of Schedule of Expenditures of Federal AwardsMaterial Weakness in Internal Control Over Compliance - OtherCriteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures offederal awards (Schedule) and accompanying notes to the Schedule.Condition: The Health Center does not have an internal control system designed to provide for the preparationof the Schedule. As auditors, we were requested to assist with the preparation of the Schedule.Cause: Auditor assistance with the preparation of the Schedule is not unusual as the Schedule has unique andspecialized requirements and preparation is only required when the Health Center meets a specified thresholdof federal expenditures.Effect: There is a reasonable possibility that the Health Center would not be able to draft the Schedule that iscorrect without the assistance of the auditors.Questioned Costs: None reported.Context: Sampling was not used.Repeat Finding from Prior Years: NoRecommendation: 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 Health Center?sschedule of expenditures of federal awards and the internal controls that impact financial reporting.Views of Responsible Officials: Management agrees with the finding.

2021-004 Department of Health and Human ServicesFederal Assistance Listing/CFDA #93.498COVID-19 Provider Relief Fund and American Rescue PlanApplicable Federal Award Number and Year ? Period 1 TIN #460239781ReportingMaterial Weakness in Internal Control Over Compliance and Material NoncomplianceActivities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control Over Compliance and NoncomplianceCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal controlover the federal award that provides assurance that the entity is managing the federal award in compliance withfederal statutes, regulations, and conditions of the federal award. The Health Center selected option 1 tocalculate lost revenue which consists of a comparison of 2019 actual results to 2020 and 2021 actual results byquarter. Patient care-related revenue should be reported net of adjustments for all third-party payers, charitycare adjustments, bad debt, and any other discounts or adjustments, as applicable when reporting patient care relatedrevenue sources.Condition: The Health Center?s lost revenue calculation was based upon actual revenue billed and reportedwithin the Health Center?s system and did not consider the impact of the year-end audit adjustments on thequarters applicable to Period 1. The Health Center re-opened the Period 1 report after guidance was receivedfrom the financial statement audit team.Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarterfor Period 1 to ensure accurate quarterly reporting of net patient revenue.Effect: The lack of adequate procedures governing program report preparation and submission increases the riskthat the lost revenue incurred by quarter was not accurate and the related report could be filed incorrectly.Questioned Costs: None reported for the activities allowed or unallowed and allowable costs as the amountclaimed for lost revenue was $80,712 less than what was eligible after considering the impact of the auditadjustments by quarter. However, for reporting, the key line items for net charges from patient care betweenthe initial submission and corrected submission decreased by $121,462. Allowable lost revenue on the revisedsubmission increased by $80,712.Context: There are 12 key line items related to lost revenue which were tested on the Period 1 Department ofHealth and Human Services special report. 4 of the 12 key line items did not accurately represent net patientservice revenue because of the impact of the audit adjustments.Repeat Finding from Prior Years: NoRecommendation: We recommend that the Health Center modify the net charges from patient care reported onfuture reports to reflect the year-end adjustments in the appropriate quarter.Views of Responsible Officials: Management agrees with the finding.

2021-005 Department of Health and Human ServicesFederal Assistance Listing/CFDA #93.498COVID-19 Provider Relief Fund and American Rescue PlanApplicable Federal Award Number and Year ? Period 1 TIN #460239781Activities Allowed or Unallowed and Allowable Costs and Cost Principles and ReportingSignificant Deficiency in Internal Control Over Compliance and NoncomplianceCriteria: 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: There was no documentation relating to mortgage principal and interest and insurance from January 2020 that supported the costs were necessary to prevent, prepare for, or respond to the coronavirus.Cause: The guidance relating to allowable costs was unclear relating to general and administrative expenses incurred in quarter 1 of 2020 prior to the start of when the Health Center first started preparing for the coronavirus. In addition, the Health Center did not document their consideration of allowability of the January 2020 expenses.Effect: Expenses included within the special report submitted to the Department of Health and Human Services for Period 1 TIN# 460239781 relating to January 2020 expenses were overstated by $31,389.Questioned Costs: $31,389; however, lost revenue and eligible expenses exceed the Period 1 funds received even when January 2020 expenses are excluded.Context: Summary level testing was performed over general and administrative expenses and healthcare related expenses, including retention pay, mortgage principal and interest, insurance, utilities, and payroll taxes. Statistical sampling was used on capital additions. In addition, a nonstatistical sample of $153,555 out of $715,435 were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend that the Center review the expenditures being claimed to determine if the expenditure is allowable under the terms and conditions of the grant. In addition, we recommend management document their consideration of allowability of January 2020 expenses.Views of Responsible Officials: Management agrees with the finding.