CRETE AREA MEDICAL CENTER

Finding No. 2021-001 Identification of Federal Program: Federal Financial Assistance Number 93.498 US Department of Health and Human Services Provider Relief Fund Criteria or specific requirement: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The terms and conditions also requires the recipient to only use PRF distributions to reimburse expenditures that have not been reimbursed from other sources or that other sources are obligated to reimburse. Condition: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the coronavirus pandemic, management did not reduce the expenses by the amounts paid by other sources. Cause: Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently claimed expenses paid by other sources. Effect: Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: Total questioned costs related to Federal Financial Assistance Number 93.498 amounted to $103,444. These costs were reimbursed by other sources. Context: The PRF and HRSA guidance indicate the funds received may only be used for healthcare related expenses that are attributable to the coronavirus not reimbursed from other sources. CAMC did not remove the costs reimbursed by other sources from the PRF reporting portal. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in amounts reported. Views of Responsible Officials: Management agrees with the noted finding, see corrective action plan. However, CAMC also incurred and reported amounts in unreimbursed expenses attributable to coronavirus in excess of the above questioned costs. Therefore, CAMC could have included additional amounts in PRF expenses to cover the questioned costs.

Finding No. 2021-001 Criteria: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. Condition: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the coronavirus pandemic, management inadvertently claimed costs that were reimbursed by other sources. Planned Corrective Action: Management will continue to refine processes to more diligently review PRF expenses to ensure only those costs incurred attributable to the coronavirus not reimbursed by other services. Planned Completion Date: Ongoing Person Responsible: Julie Lacy, CFO

Finding No. 2021-002 Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund Criteria: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. Condition: During the process of identifying lost revenue related to the coronavirus pandemic, management incorrectly included transfers to related entities as lost revenue. Cause: Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently included transfers to related parties in their lost revenue calculation. Management input lost revenue based on their interpretation of HRSA regulations at the time of the PRF reporting submission. Effect: Management included amounts in the PRF reporting portal which were not lost revenue based on the terms and conditions of the PRF reporting. Questioned Costs: Total questioned costs related to Federal Assistance Listing Number 93.498 amounted to $410,744. This amount was the transferred targeted distribution to a related entity. Context: The terms and conditions of the PRF allows the recipient to include lost revenue attributable to coronavirus as a use of PRF funds. Management reported $771,825 of transfers to related party as lost revenue. Based on the reporting of the $771,825, there was $361,081 of excess of possible lost revenue eligible for reimbursement. If the $771,825 had not been included in the lost revenue, $410,764 of PRF payments would have been shown as unused after applying lost revenue. However, the provider reported more than $410,764 in unreimbursed expenses attributable to coronavirus. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that lost revenue amounts are reported. Views of Responsible Officials: Management agrees with the noted finding, see corrective action plan. However, CAMC also incurred and reported amounts in unreimbursed expenses attributable to coronavirus in excess of the above questioned costs. Therefore, CAMC could have included additional amounts in PRF expenses to cover the questioned costs.

Finding No. 2021-002 Criteria: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. Condition: During the process of identifying lost revenue related to the coronavirus pandemic, management incorrectly included transfers to related entities as lost revenue. Planned Corrective Action: Management will continue to refine processes to more diligently review reporting requirements and the accumulation of eligible expenditures to ensure the terms and conditions of the PRF and reporting guidance provided by HRSA is followed. However, CAMC also incurred and reported sufficient unreimbursed expenditures attributable to coronavirus in the PRF reporting portal that if the noted item was not reported, CAMC would have satisfactorily incurred sufficient eligible expenses in excess of the PRF funds received, including interest earned on such funds. Planned Completion Date: Ongoing Person Responsible: Julie Lacy, CFO