MCLEOD HEALTH

Assistance Listing, Federal Agency, and Program Name 93.870, Maternal, Infant, and Early Childhood Home Visiting Grant Federal Award Identification Number and Year S-MIEC-F-2025-9-1 Pass through Entity Children's Trust of South Carolina Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Organization was reimbursed $22,968 under the grant award but amounts were outside of performance year of the grant. The control in place to review expenditures was not effective in identifying expenditures that were outside the grant period. Questioned Costs $22,968 If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed The question costs were determined by totaling all of the expenses that were identified to be outside the period of performance of the grant. Context Two contracts were entered into during the year with both having costs that were to be incurred in future period not covered by grant, but both were fully charged to grant for current fiscal year. Through testing of procurement noted that contract term started part way though grant year and for period after end of the grant's period of preformance. As through procurement there were only two contracts entered into the total cost is $22,968 of expenditures related to future period. Cause and Effect The Organization's control over contractor payments was not designed effectively to ensure costs incurred prior to requesting for reimbursement. The failure to have an effective control in place caused the Organization to charge a cost to the program that the Organization had not yet incurred. Recommendation We recommend that the review of process ensure that items have been expended prior to charging amount to the grant. Views of Responsible Officials and Planned Corrective Actions The Organization acknowledges that the expenditure was reimbursed outside of the grant’s period of performance under review due to the nature of the expenditure and accounting treatment selected. The Organization will implement enhanced review procedures of federal expenditures sought for reimbursement to better align with the underlying accounting treatment.

Assistance Listing, Federal Agency, and Program Name 93.247 Advanced Nursing Education Grant Program Federal Award Identification Number and Year 22T96HP45839 Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR Section 200.510(b), "the auditee" must create a Schedule of Expenditures of Federal Awards (SEFA) if they expend more than $1 million in federal awards during their fiscal year. The schedule of expenditures of federal awards should include all expenditures associated with federal grants during the fiscal year. Per 2 CFR 200.400(d), the accounting practices of the recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Condition The Organization lacked effective controls over the review of the SEFA to ensure that only federal expenditures were included for fiscal year 2025 and to ensure that expenditures were appropriately tracked and recorded to the correct grant period. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context The Organization lacked effective controls to ensure that expenditures were appropriately tracked to individual grants and recognized in the proper reporting period. Consequently, the original SEFA included nonfederal expenditures. Completeness testing identified approximately $120,000 of expenditures that did not pertain to current year federal awards, as well as approximately $65,000 of expenditures related to prior year activity that were inappropriately included on the SEFA. Cause and Effect The Organization does not have an award management system connected to its accounting software to appropriately track federal grants and their associated expenditures. This prevented the Organization from being able to implement effective controls to validate expenditures were applied to the proper grant in the proper period and to ensure that transactions were accounted for consistently between the financial statements and the SEFA. Recommendation We recommend that management implement procedures to perform a review at period end to ensure all payroll and accounts payable accruals are properly included on the SEFA and any amounts related to a future period (prepaid expenses) are excluded. We additionally recommend that management implement procedures to ensure only federal activity is reflected within the SEFA. Views of Responsible Officials and Planned Corrective Actions The Organization acknowledges certain errors in grant tracking and SEFA preparation resulting from the lack of an integrated award management system. The Organization will enhance its reviews around SEFA preparation and federal expenditure tracking to accommodate the lack of an integrated system as well as to ensure cut-off, completeness, and classification of federal expenditures.

Assistance Listing, Federal Agency, and Program Name 93.870, Maternal, Infant, and Early Childhood Home Visiting Grant Federal Award Identification Number and Year S MIEC F 2022 9 2, 2024 Pass through Entity Children's Trust of South Carolina Finding Type Material weakness Repeat Finding No Criteria Per the award agreement, awardees are required to submit Financial Request for Payments (FRP) at least quarterly by the end of the month following the month to be invoiced. Condition The Organization had a control to review and certify the Financial Request for Payment; however, the control was ineffective and resulted in untimely submission of the request to the awarding agency. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Out of a sample of eight Financial Requests for Payment, we identified one that was not certified or submitted within the required timeframe. The FRP was certified one day after the submission deadline and submitted five days after the submission deadline. Cause and Effect The Organization designed controls related to reviewing and certifying the FRPs; however, the review process did not ensure that requests were submitted on time. The failure to have an effective control in place caused the Organization to not meet the submission date. Recommendation We recommend that the review process include procedures to ensure prompt submission to meet the reporting requirements associated with the award. Views of Responsible Officials and Corrective Action Plan The Organization will revise its internal process to include a dual-review system. Two designated staff members will now be cross-trained and authorized to review and certify Financial Requests for Payment to ensure timeliness. A formal submission calendar will be developed, including internal deadlines that precede the agency's due dates by a minimum of five business days.

Assistance Listing, Federal Agency, and Program Name 97.039, Hazard Mitigation Grant Program Federal Award Identification Number and Year 4394-31, 2024 Pass through Entity South Carolina Emergency Management Division Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria In accordance with 2 CFR section 200.302(b)(6), all non federal entities must establish written procedures to implement the cash management requirements of 2 CFR section 200.305. Condition The Organization did not have a formal cash management policy in place for the period under audit. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context After discussion with management, it was identified that the organization does not maintain a formal cash management policy. Cause and Effect There is not an established control to ensure that a written policy is in place. Because there is no written policy, the Organization is not in compliance with 2 CFR 200.302(b)(6). Recommendation We recommend that the Organization implement a formal cash management policy and that controls are implemented to ensure that it is maintained and updated, as necessary. Views of Responsible Officials and Planned Corrective Actions The Organization implemented a Federal Awards Administration Policy which includes a formal cash management policy in February 2025.

Assistance Listing, Federal Agency, and Program Name 97.039, Hazard Mitigation Grant Program Federal Award Identification Number and Year 4394-31, 2024 Pass through Entity South Carolina Emergency Management Division Finding Type Material weakness Repeat Finding No Criteria The Schedule of Expenditures of Federal Awards should include all expenditures associated with federal grants during the fiscal year and there should be controls to ensure no double dipping of expenditures across federal grants. Condition The Organization did not capture certain Hazard Mitigation Grant funding that was expended in a previous period on the SEFA and did not effectively apply controls to ensure expenditures are tracked to a unique grant in a proper period. Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context The Organization improperly excluded $1,974,294 of expenditures related to the Hazard Mitigation Grant Program from the September 30, 2023 Schedule of Expenditures of Federal Awards. The Organization also did not apply appropriate controls to ensure expenditures are tracked to a unique grant in a proper period. Cause and Effect The Organization does not have an award management system connected to their accounting software to appropriately track federal grants and their associated expenditures. This prevented the Organization from being able to implement effective controls to validate expenditures were applied to the proper grant in the proper period. This also resulted in the Organization having an incomplete SEFA for the fiscal year ended September 30, 2023. Recommendation Our recommendation is that the organization implements a centralized grants management system that is linked to the accounting system to clearly link expenditures to their corresponding federal award. Views of Responsible Officials and Planned Corrective Actions The Organization will implement a centralized grant tracking log within the financial system that uniquely identifies each federal grant and records expenditures by program and fiscal year. The Organization will conduct annual cross-departmental training on SEFA reporting requirements, emphasizing the importance of accurate and timely classification of federal expenditures. The Organization will require quarterly reconciliations between grant activity logs and the general ledger to validate completeness and timing accuracy before SEFA preparation.

Assistance Listing, Federal Agency, and Program Name 93.870, Maternal, Infant, and Early Childhood Home Visiting Grant Federal Award Identification Number and Year S MIEC F 2022 9 2, 2024 Pass through Entity Children's Trust of South Carolina Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Expenditures should be approved, following the Organization's policies and procedures, and incurred before requesting reimbursement to ensure costs are allowable under the Program. Condition The Organization had a control in place to approve contractor expenditures prior to charging the expense to the Program; however, the control was ineffective and resulted in a cost being requested for reimbursement that had not been incurred by the Organization. Questioned Costs $1,667 If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed The questioned costs total the amount of the invoiced identified as unallowable. Context Out of a sample of 40 expenses, we identified one expense that was not appropriately approved by the Organization's control processes and was not paid for. Cause and Effect The Organization's control over contractor payments was not designed effectively to ensure costs were approved and incurred prior to requesting reimbursement. The failure to have an effective control in place caused the Organization to charge a cost to the Program that the Organization had not yet incurred. Recommendation We recommend that the review process ensure that items have been expended prior to charging the amount to the grant. Views of Responsible Officials and Planned Corrective Actions The Organization will implement a mandatory documentation checklist, including verified contractor invoices and proof of service completion, prior to approving any expense charged to the Program. The Organization will adopt a two-level approval process—requiring sign-off by both the Program Manager and the Finance Department to validate incurred costs.

Assistance Listing, Federal Agency, and Program Name - 93.498, COVID 19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Award Identification Number and Year - N/A, 2023 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Per the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Post Payment Notice of Reporting Requirements dated February 16, 2024, recipients may use payments for eligible expenses so long as the expenses were to prevent, prepare for, and respond to coronavirus not reimbursed by other sources or that other sources are obligated to reimburse. Condition - The Organization had a control to review the allowable expenses identified under this award; however, the control was ineffective and resulted in the inclusion of a duplicate invoice in the portal submission. Questioned Costs - $1,400 Identification of How Questioned Costs Were Computed - The questioned costs total the amount of the invoice identified as a duplicate expense. Context - Out of a sample of 40 expenses, we identified expenses from 1 invoice that were incorrectly included in the detail of expenditures twice. Cause and Effect - The Organization designed controls related to identification of allowable costs, which included a review of the of the expense listing; however, the review process did not effectively identify an expense that was included twice. The failure to have an effective control in place caused the Organization to duplicate an expense within their portal submission. Recommendation - We recommend that the review process include specific procedures to ensure that no expenses have been included more than once. Views of Responsible Officials and Corrective Action Plan - An additional review process for duplicate invoice numbers will be included going forward after our contracted reviewer performs their review.

ALN Number, Federal Agency, and Program Name - 93.461, U.S. Department of Health and Human Services, COVID-19 - Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund Federal Award Identification Number and Year - N/A, 2022 Pass through Entity - N/A Finding Type: Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The COVID-19 - HRSA Uninsured Program is to be used for "reimbursement of payment for COVID-19 testing and testing-related items for individuals who do not have coverage through an individual or employer-sponsored plan," per the 2022 Compliance Supplement Condition - The Organization charged costs to the grant which were associated with individuals who were subsequently discovered to have insurance. In addition, the Organization did not timely refund private pay patients for payments that were paid by HRSA funding. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During testing of 60 patients, we identified three patients who were submitted to the Health Resources and Services Administration (HRSA) for reimbursement, and then a subsequent payment was received from insurance and HRSA or private pay which was not returned timely to the patient or HRSA. Management performed a deeper review of these issues and identified 63 additional patients that fell into one of these two categories. As a result of management's analysis approximately $4,600 was removed from the SEFA and returned to HRSA and approximately $3,900 was refunded directly to patients. Cause and Effect - While the Organization had a process in place to review individuals for eligibility prior to claims being submitted, there was no process in place for when subsequent payments were received from insurance or patients to timely refund the patient or HRSA. Recommendation - The Organization should have a process in place to review and identify subsequent payments on claims for insurance and private pay patient, in which refunds need to be issued to patients or HRSA. Views of Responsible Officials and Corrective Action Plan - Management agrees with the findings as reported. The Organization identified all patients and HRSA refunds.