VILLAGE SHALOM, INC.

Assistance Listing No: 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Not applicable Award Number / Year: Not applicable / 2020 Criteria: All recipients of Provider Relief Fund (PRF) payments must comply with the Revenue Reporting Guide and the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (collectively, the Guidance). PRF payment amounts (excluding the Nursing Home Infection Control Distribution payments) not fully expended on health care-related expenses attributable to coronavirus may be applied to patient care lost revenues, if applicable. Recipients may choose to apply PRF payments toward lost revenues using one of three options: Option i: the difference between actual patient care revenues for each calendar quarter in 2019 versus 2020, and 2019 versus 2021. Option ii: the difference between budgeted and actual patient care revenues for each calendar quarter in 2020 and 2021, as long as the budgets utilized for this option were approved prior to March 27, 2020. Option iii: calculated by any reasonable method of estimating revenues. Condition/Context: Although the Organization's 2020 budget was approved prior to March 27, 2020, the Organization's 2021 budget was approved after March 27, 2020. As a result, the Organization incorrectly reported lost revenue under Option ii, as they did not have an approved budget covering the entire periods of availability. Cause: Management incorrectly interpreted the Guidance which requires approved budgets prior to March 27, 2020 for all periods (i.e., 2020 and 2021) included in the PRF award periods of availability. Effect: The lost revenue amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with the Guidance. Questioned Costs: Not Determinable. Recommendation: We recommend that management review their processes and procedures to ensure that lost revenues are calculated in accordance with the Guidance.

Assistance Listing No: 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Not applicable Award Number / Year: Not applicable / 2020 Criteria: All recipients of PRF payments must comply with the Revenue Reporting Guide and the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (collectively, the Guidance). Condition/Context: The Organization did not correctly apply the Guidance to calculate lost revenues. The Organization selected reporting Option ii and erroneously included revenues attributable to contributions, net asset released from restrictions (for operating purposes), and other non-resident related revenue in the 2019, 2020, and 2021 revenue amounts entered into the HRSA PRF Reporting Portal. The adjustments needed within the HRSA PRF Reporting Portal to correct the inclusion of these revenues would decrease the amount eligible for lost revenue reimbursement for Periods 1 and 2 from $7,017,539 to $6,917,276 on total PRF distributions, excluding the Nursing Home Infection Control Distribution distributions, of $725,571. Cause: Management incorrectly interpreted the Guidance. Effect: The amounts reported to the HRSA were not in accordance with the Guidance. Questioned Costs: None. Recommendation: We recommend that management review their processes and procedures to ensure that lost revenues are calculated in accordance with the Guidance.