ROCK COUNTY HOSPITAL

FINDING 2021-004 Federal program CFDA Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund Criteria The terms and conditions of the CARES Act Provider Relief Funds (PRF) distributions state that funds are not to be used to reimburse expenses or losses that have 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 such costs by estimated cost-based reimbursement to be received from Medicare and Medicaid programs. 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 did not reduce certain costs by the estimated Medicare and Medicaid cost-based reimbursement as it had done for other expenses incurred to prevent, prepare for or respond to the coronavirus. Effect Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions. Questioned costs Total questioned costs amounted to $80,339 which is related to the estimated Medicare and Medicaid cost-based reimbursement the Hospital expects to receive for the reported costs. Perspective/Context Although the Hospital did reduce the majority of applicable costs by the estimated Medicare and Medicaid reimbursement amounts, there were certain costs that it missed applying the reimbursement factor to resulting in these cost not being appropriately reduced. Recommendation We recommend the Hospital continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in the amounts expended. Views of responsible officials and planned corrective actions Management agrees with the noted finding. However, the Hospital in total reported $232,042 in amounts exceeding the PRF distributions which could be used to replace the questioned costs. Management will continue to refine its processes to ensure all expenditures reported are appropriately reduced for estimated Medicare and Medicaid cost-based reimbursement.

FINDING 2021-005 Federal program CFDA Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund Criteria/Condition Lost revenues were reported under option 1 and therefore amounts are required to be reported using actual quarterly revenues for the applicable quarters. The Hospital computed lost revenues for the second quarter of 2021 in the amount of $45,837 but it appears the calculation did not include a year-end audit adjustment that would have resulted in there being no lost revenues to report for this quarter. Cause There was a late audit adjusting journal entry associated with the third-party payor accounts that was not taken into account in the computation of lost revenues for the second quarter of 2021. This adjustment was not able to be determined until after the reporting deadline resulting in the Hospital not being able to include it in the calculation. Effect Lost revenues were over reported by $45,837. Questioned costs Total questioned costs amounted to $45,837, which is related to the error discovered in the Hospital?s calculation of lost revenues reported. Perspective/Context The error in the calculation was the result of a late audit adjustment and only impacted the calculation for the second quarter of 2021 lost revenues. Recommendation Hospital management will need to consider this difference going forward to assure the carry over effect of this error is handled correctly in all future reporting periods. Views of responsible officials and planned corrective actions Management agrees with the noted finding. However, the Hospital in total reported $232,042 in amounts exceeding the PRF distributions which could be used to replace the questioned costs. Management will continue to refine its processes to ensure lost revenue calculations are appropriately computed for future reporting periods.

FINDING 2021-006 Federal program CFDA Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund Criteria/Condition The federal program requires the reporting entity to report all other COVID-19 program assistance received by quarter during the applicable reporting periods. Cause Hospital management misinterpreted the reporting requirements and reported both amounts that should not have been reported and missed including other amounts that should have been included as Other Assistance. Effect Amounts reported as Other Assistance were misstated resulting in it appearing the Hospital received more funds in Other COVID-19 Assistance than what was really received. Questioned costs None. Perspective/Context The Hospital reported $3,637,618 of amounts that were actually Provider Relief Funds as Other Assistance. The Hospital also did not include $91,646 of grants received to be used for COVID-19 expense as Other Assistance. This reporting error does not appear to have affected the final total amount of expenditures reported as allowable under the Provider Relief Fund. Recommendation Hospital management should further review the specific Provider Relief Fund program reporting requirements to assure all applicable reporting requirements are met for future reporting periods. Views of responsible officials and planned corrective actions Management agrees with the noted finding. Management will continue to monitor and enhance its internal controls over federal award compliance to ensure that all reporting requirements are met.

FINDING 2021-007 INTERNAL CONTROLS OVER COMPLETION OF PROVIDER RELIEF FUND REPORTING - SIGNIFICANT DEFICIENCY Criteria The Hospital should have a process in place to assure the most current and relevant Provider Relief Fund program (FAL 93.498) reporting guidelines are timely reviewed to assure all reporting requirements are met. Conditions Potential errors were noted in the reporting of information for the reporting period ending June 30, 2021. Cause The Hospital misinterpreted guidance regarding the amounts that should have been reported as Other Assistance in the Provider Relief Fund reporting form. Effect and recommendation We suggest the Hospital continue to monitor and review the applicable guidance associated with this program to assure all required future reporting requirements are completed correctly. Views of Responsible Officials and Planned Corrective Actions Management agrees with the noted finding. Management will continue to monitor and enhance its internal controls over federal award compliance to ensure that all reporting requirements are met.