WEBSTER COUNTY COMMUNITY HOSPITAL

FINDING 2021-002 Federal program CFDA Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund Criteria/Condition Amounts reported as eligible costs are required to be reduced by the amount of cost based reimbursement expected to be received through the Medicare and Medicaid critical access hospital cost reports for the applicable reporting periods. We identified certain costs where it appears management either missed applying the reimbursement rates to or applied an incorrect rate. Cause Due to the amount of detailed calculations required under the PRF reporting, management inadvertently missed reducing certain costs reported by the expected Medicare and Medicaid reimbursement amounts. Effect Management included costs that appear to not be eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned costs Total remaining questioned costs amount to $50,637 and were computed by applying estimated Medicare and Medicaid reimbursement rates to the applicable cost categories. Perspective/Context We noted errors during our testing of management?s calculations related to reducing certain costs by amounts estimated to be received under cost based reimbursement programs. Management then re-performed its calculations and revised its original filing and subsequently paid an additional amount of $117,084 back to HRSA. We performed additional testing on the revised calculations and determined there still appear to be some costs not reduced correctly resulting in the above noted questioned costs of $50,637. All the cost categories were tested to assure management reduced the applicable ones by Medicare and Medicaid estimated reimbursement rates and those noted with either incorrect rates or no rate applied were recomputed to determine the amount of questioned costs. Recommendation We recommend management continue to monitor and enhance its overall internal controls over PRF reporting to ensure required reductions in final costs reported are performed correctly. Additionally, we suggest management consider revising its calculations again and correct its filing for any amounts determined to be incorrectly computed. Views of responsible officials and planned corrective actions Management agrees with the noted finding and is performing an internal review of the calculations. Once this process is complete management will determine if it is appropriate to contact HRSA and revise its latest PRF reporting document.

FINDING 2021-003 Federal program CFDA Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund Criteria/Condition Lost revenues are reported using one of 3 options. Option (1) actual versus actual, option (2) actual versus budget or option (3) any reasonable alternative method. Management reported its lost revenue data under option 2 which requires a budget approved by March 27, 2020. The Hospital did not have a budget approved by this required date for all the applicable reporting periods. Cause Management inadvertently reported under option 2 when it had intended to report using option 3. Effect Management reported as allowable costs certain quarters of lost revenue amounts that would not have qualified under option 2. Questioned costs None ? based on subsequent refiling. Perspective/Context Management revised its original reporting to change the reporting of lost revenues from option 2 to option 3 for which an approved budget is not required. Recommendation We recommend management continue to monitor and enhance its overall internal controls over PRF reporting to ensure required reporting methods for lost revenue are correctly completed on PRF filings to avoid having to revise filings at later dates. Views of responsible officials and planned corrective actions Management agrees with the finding and as noted has revised the original PRF reporting to change the reporting of lost revenues from option 2 to option 3.

FINDING 2021-004 INTERNAL CONTROLS OVER COMPLETION OF PROVIDER RELIEF FUND REPORTING - SIGNIFICANT DEFICIENCY Criteria The Hospital should have a process in place to assure all calculations preformed to determine allowable amounts are accurate and reported correctly. Conditions As noted in findings 2021-002 and 2021-003 potential errors were noted in the reporting of information for the reporting period ending June 30, 2021. Cause The Hospital had limited personnel available to dedicate to the process of accumulating and determining costs eligible to report in the PRF reporting portal. Effect and recommendation We recommend management continue to monitor and enhance its overall internal controls over PRF reporting to ensure accurate reporting on all future PRF filings. Views of responsible officials and planned corrective actions Management agrees with the noted finding and will continue to refine its reporting processes to ensure accurate future reporting.