The Johns Hopkins Health SystemNon-Profit

2025-001: Reporting – Early Steps Grantor: Department of Education (ED) Program Title: Special Education Grants for Infants & Families Award Name: Early Steps Award Numbers: H181A230099 Assistance Listing Titles: Special Education – Grants for Infants & Families with Disabilities Assistance Listing Number: 84.181 (Federal Portion), 64.022 (State of Florida Portion) Award Years: July 1, 2024 – June 30, 2025 Passthrough Entities: Department of Health (Federal Portion), The State of Florida Department of Health (State of Florida Portion) Criteria Report Name Reporting Requirements Request for Payment (Monthly Invoice) Provider must submit a properly completed invoice via email to the Contract Manager no later than the last calendar day of the following month. Claims Report Prepare a monthly Claims Report and submit it to the Contract Manager no later than submission of the monthly invoice. Condition Per the award agreement, The Johns Hopkins Health System (“JHHS”) is required to submit Requests for Payments and Monthly Claims Reports by specified deadlines. Through our testing, we noted that three of the five selected reports were not filed timely in accordance with the terms and conditions of the program award agreement. We did note, however, that the reports were accepted subsequent to the late filings. Refer below for the specific selections and observations: Report Name Condition Request for Payment (Monthly Invoice) – August 2024 We noted that “Request for Payment (Monthly Invoice) – August 2024” was filed on 10/1/2024, against the due date of 9/30/2024. Claims Report – October 2024 We noted that “Claims Report – October 2024” was filed on 12/5/2024, against the due date of 11/30/2024. Request for Payment (Monthly Invoice) – May 2025 We noted that “Request for Payment (Monthly Invoice) – May 2025” was filed on 7/22/2025, against the due date of 6/30/2025. Cause For the selections tested, we noted that the reports above were not filed timely in accordance with the various terms and conditions of the award agreement due to complications resulting from Hurricane Helene and internal miscommunications. Effect JHHS did not submit the reports listed above within the appropriate period per the award agreements. Therefore, The Johns Hopkins Health System was not in compliance with the reporting requirements. Questioned Costs There are no questioned costs associated with this finding. Recommendation JHHS should monitor reporting and ensure that reports are submitted on a timely basis or otherwise, ensure that an extension request is submitted and supporting documentation is retained.

2024-001: Suspension and Debarment Control Design Deficiency Grantor: Department of the Treasury Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Name: American Rescue Plan Act (“ARPA”) - Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund, Coronavirus State and Local Fiscal Recovery Funds (HVIP) Award Numbers: GRT000755, GRT000759 Assistance Listing Titles: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Years: May 1, 2023 – December 31, 2024, July 1, 2023 – September 30, 2024 Passthrough Entities: Baltimore City Health Department, Mayor and City Council of Baltimore Criteria Per 2 CFR 200.214, when entering into a covered transaction with an entity, the auditee must have established procedures to verify that the entity is not suspended, debarred or otherwise excluded from participating in the transaction. Condition JHHS did not have robust procedures and controls in place from Q1 through Q3 FY2024 to ensure that an upfront suspension and debarment check was performed on all external vendors prior to entering into a covered transaction with JHHS. Cause Since 2018, JHHS has relied on a third-party service provider, PaymentWorks, to perform suspension and debarment checks on external vendors, which requires a setup process to be completed by the vendor. There were some vendors that did not complete setup in PaymentWorks, for which management did not perform a separate suspension and debarment check manually. Starting in Q4 2024, management implemented a quarterly control procedure to reconcile all vendors with expenditures in the federal grant cost center to the PaymentWorks listing to identify vendors for which a manual suspension and debarment check must be performed. Effect There was a period of time, Q1 through Q3, in which JHHS may have entered into covered transactions with suspended or debarred entities. When management performed the new control in Q4 2024, they identified 11 vendors that had not been previously reviewed and performed a manual check for suspension and debarment via Sam.gov. None of these 11 vendors manually checked were suspended or debarred. There were no instances of noncompliance identified as a result of this control design deficiency in our FY2024 audit work. Questioned Costs There are no questioned costs associated with this finding. Recommendation JHHS should continue the quarterly process of reconciling the complete vendor listing with PaymentWorks to ensure all necessary vendors are reviewed for suspension and debarment prior to entering into covered transactions. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

2024-002: Healthy Start Fringe Rate Grantor: Department of Health and Human Services Program Title: Healthy Start Initiative Award Name: Healthy Start Initiative‐Eliminating Racial/Ethnic Disparities Award Number: H4927805 Assistance Listing Title: Healthy Start Initiative Assistance Listing Number: 93.926 Award Year: April 1, 2023 – August 31, 2024 Passthrough Entity: None Criteria Per 2 CFR 200.431(c), the cost of fringe benefits are allowable provided that the benefits are reasonable. Condition Per the Johns Hopkins All Children's Hospital, Inc. Hospital Rate Agreement dated 12/23/2022, the agreedupon fringe rate was 27% for the period 7/1/2022 to 6/30/2026. JHHS charged costs for fringe benefits to the award at the rate of 29% during the 2024 fiscal year. Cause Since the Notice of Award #4H49MC27805-10-05 stated that up to 25% of the total approved budget may be reallocated within the approved categories without prior approval, management believed they were allowed to charge fringe costs at a rate higher than the agreed-upon negotiated rate if the difference in cost did not exceed 25% of the budget. Effect JHHS charged $5,906 of additional fringe costs to the award in excess of the agreed-upon negotiated rate. Questioned Costs The $5,906 of additional fringe charged to this award in excess of agreed-upon fringe rate is a questioned cost. Recommendation JHHS should establish a process to ensure that the appropriate or agreed-upon negotiated fringe rate is being used, unless the award agreement allows for any modification of the negotiated rate or prior agency approval is obtained. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

2024-003: Healthy Start Procurement Compliance and Control Deficiency Grantor: Department of Health and Human Services Program Title: Healthy Start Initiative Award Name: Healthy Start Initiative‐Eliminating Racial/Ethnic Disparities Award Number: H4927805 Assistance Listing Title: Healthy Start Initiative Assistance Listing Number: 93.926 Award Year: April 1, 2023 – August 31, 2024 Passthrough Entity: None Criteria Per 2 CFR 200.318-320, the auditee must maintain and use documented procedures for procurement transactions under a Federal award, including that procurement transactions must be conducted in a manner that provides full and open competition. Condition In accordance with JHHS’ Competitive Bidding Policy dated 5/5/2020, competitive bidding must be performed for all purchases under federal grants that exceed $3,000. JHHS’ policy has three exceptions: 1) emergency procurements, 2) compatible product requirements, which includes an option for the completion of a sole source justification memo, and 3) recently bid products/ services. For 2 of 2 procurement selections tested during the audit for the Healthy Start Initiative award, no evidence was found that competitive bidding procedures were followed in accordance with JHHS policy. Cause There was no control operating to ensure adherence to JHHS’s Competitive Bidding Policy on competitive bidding or sole source justification requirements prior to entering into a procurement transaction. Effect JHHS was not in compliance with federal requirements relating to procurement and two transactions were entered into without full and open competition. Questioned Costs There are no questioned costs associated with this finding. Recommendation JHHS should establish a control process to ensure that all required competitive bidding or sole source justification requirements are followed including review and approval prior to entering into procurement transactions, and evidence of such review and approval is maintained. JHHS should also ensure appropriate training and communication is shared with all departments responsible for managing federal grant programs to ensure adherence to federal requirements and with JHHS policy. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

2024-004: Use of Expired Federally Negotiated Rate Grantor: Department of Health and Human Services, National Institute of Health (NIH)/ National Institute on Drug Abuse Cluster: Research & Development Award Name: Clinical Support Services for the Research Efforts of the Stroke Branch, Section on Stroke Diagnostics and Therapeutics, NINDS, NIH Award Number: 75N95019C00074 Assistance Listing Title: National Institute of Neurological Disorders & Stroke Direct Award Assistance Listing Number: 93.RD Award Year: September 28, 2019 – September 27, 2024 Passthrough Entity: None Criteria In accordance with Section 2(c) of OMB Uniform Guidance Appendix IV to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, organizations that have previously established indirect cost rates must submit a new indirect cost proposal to the cognizant agency for indirect costs within six months after the close of each fiscal year. Condition JHHS had a federally negotiated indirect cost rate agreement for the period 7/1/2015- 6/30/2019, which had an approved rate of 39.5%. An extension of the rate was granted through 6/30/2021, but the new indirect cost rate proposal has not been accepted. In FY24, JHHS continued to charge indirect costs to the National Institute of Neurological Disorders & Stroke Direct Award using this rate, despite the fact that this rate had expired. Cause As a result of JHHS staff turnover, management failed to finalize the new federally negotiated indirect cost rate in a timely manner. Rate negotiations are currently in progress. Effect JHHS has charged $145,295 of indirect costs to this award, which has been approved for reimbursement by the granting agency, but is using an expired rate agreement. Questioned Costs There are no questioned costs associated with this finding. JHHS has continued to use the historically accepted rate during the ongoing negotiations. Recommendation JHHS should establish control procedures to ensure that the indirect cost rates used are related to approved and effective rate agreements. Management should also ensure submitted rate proposals are approved in a timely manner such that there is no lapse in rate agreements or a provisional rate is established during periods of rate negotiations. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

2024-005: Timeliness of Cost Transfers Grantor: Department of Health and Human Services, National Institute of Health (“NIH”), National Heart, Lung, and Blood Institute, Eunice Kennedy Shriver National Institute of Child Health & Human Development Cluster: Research & Development Award Names: KidsDOTT-CCC, Pediatric Biospeciment Procure Center (BPC) supporting the Developmental Gene (dGTEx) Project Award Numbers: U01HL130048, U24HD106537 Assistance Listing Titles: Blood Diseases and Resources Research, and Child Health and Human Development Extramural Research Assistance Listing Numbers: 93.839 and 93.865 Award Years: September 15, 2016 – June 30, 2024 and September 9, 2021 – August 31, 2024 Passthrough Entity: Johns Hopkins University Criteria The National Institute of Health Grants Policy Statement requires cost transfers that represent corrections of clerical or bookkeeping errors be made promptly after the error occurs but no later than 90 days of when the error was discovered. Cost transfers must be appropriately justified, documented and completed in a timely manner to support its allowability. Condition For 5 of 7 cost transfer selections tested, there were salary cost transfers which were over 90 days and without formal supporting documentation justifying the reason for the cost transfer and approval of such supporting documentation from the respective grant Principal Investigator (“PI”) as required within 90 days of the error being discovered. Cause JHHS did not have a formal cost transfer policy and as such, there were inconsistent processes in place regarding cost transfers, such as verbal discussions with grant PIs, lack of maintenance of documentation explaining how the errors occurred and periods of time longer than 90 days between discovery of costs needing to be moved onto the grant and actual transfer of costs. Effect The salary cost transfers made in FY24 were appropriate such that the costs were allowable and allocable to the grants to which they were transferred, however, there was a lack of controls operating over the timeliness and sufficiency of supporting documentation for cost transfers during the fiscal year. Questioned Costs There are no questioned costs associated with this finding. Recommendation We note management implemented a new control in FY25, which requires formal written documentation and sign off on all cost transfers by grant PIs. JHHS should implement a formal written policy over cost transfer processes that is in compliance with federal guidelines with respect to timeliness of approvals and maintaining supporting evidence. Additionally, we recommend JHHS communicate, provide training and enforce the policy to ensure cost transfers are executed and documented in accordance with policy. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

2024-006: Return of Interest Earned on Advance Payment Cash Receipts Grantor: Department of Health and Human Services (DHHS) Program Title: Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities Award Name: Region 3 Emerging Special Pathogen Treatment Center at The Johns Hopkins Hospital (JH Biocontainment Unit) Award Number: U3REP220674 Assistance Listing Title: Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities Assistance Listing Number: 93.817 Award Year: September 30, 2023 – September 29, 2024 Passthrough Entity: None Criteria Per 2 CFR 200.305(b)(11)-(12), the auditee must maintain advance payments of Federal funds in interestbearing accounts and may retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the DHHS Payment Management System (PMS). Condition JHHS received advance payments from DHHS for the HPP award totaling $1,615,384 in October 2023, which were maintained in an interest-bearing account and disbursed over the period through September 2024. During the fiscal year ended 6/30/2024, JHHS earned $51,620 of interest, which was not returned to DHHS. Cause Management was not aware of the requirement to return interest earned on advance payments in excess of $500. Effect Management did not perform a calculation of interest earned and return the interest earned to DHHS at least annually, as required. Questioned Costs There are no questioned costs associated with this finding. Recommendation JHHS should return the interest earned to DHHS as required, and establish a process to ensure that interest on advance payments received from federal agencies is calculated at least annually and returned appropriately if interest earned is in excess of $500. Management’s Views and Corrective Action Plan Refer to Management’s View’s and Corrective Action Plan at the end of the report.

COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Reporting Cluster: Not applicable Federal Agency: Department of Health and Human Services (“HHS”) Award Name: COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Assistance Listing #: 93.498 Assistance Listing Title: COVID-19 - Provider Relief Fund and American Rescue Plan Rural Distribution – Period 4 and Period 5 Award Year(s): January 1, 2020 – December 31, 2022 and January 1, 2020 – June 30, 2023 Criteria Step Six of the Steps on Reporting on Use of Funds section of the June 11, 2021 Provider Relief Fund (“PRF”) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues to use one of the following three options for calculating lost revenues: • Option (i): difference between actual patient care revenues and actuals for each quarter during the period of availability; • Option (ii): difference between budgeted (budget approved prior to March 27, 2020) and actual patient care revenues for each quarter during the period of availability; or • Option (iii): any reasonable method of estimating revenues Condition Through our testing of the JHHS affiliate, Johns Hopkins Regional Physicians’ (JHRP) period 4 HRSA reporting portal submission, we identified a $168,000 discrepancy between the actual patient care revenue amount input into the portal for Q3 2021 and the actual patient care revenue amount per JHRP’s general ledger, which supports it’s lost revenue calculation. Cause The actual patient care revenue for Q3 2021 used within the lost revenue calculation reported via the HRSA portal differed from the amount per the general ledger due to additional revenues other than patient care revenue being included in the HRSA portal reporting. Effect Inputs into the lost revenue calculation were not accurate and impacted the total lost revenue calculated by JHRP for Q3 2021. However, the amounts input incorrectly into the “Total Revenue/Net Charges from Patient Care” line for Q3 2021 did not have an impact on lost revenue that JHRP could claim in the reporting period as JHRP maintained sufficient capacity in amounts that qualified for use. Additionally, the impact from correcting the input error increased the lost revenue of JHRP for Q3 2021 by $168,000. Questioned Costs There are no questioned costs associated with this finding as the exceptions noted relate to an aspect of reporting which would have increased the potential qualifying funds of JHRP. Recommendation Management should implement procedures to ensure that the lost revenue calculation used to report data into the HRSA portal is reconciled to patient care revenues per the general ledger. Management’s Views and Corrective Action Plan Refer to Management’s Views and Corrective Action Plan at the end of this report.

GSA_MIGRATION