INDIANHEAD MEDICAL CENTER-SHELL LAKE, INC.Non-Profit

Finding 2021-004 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Internal Control, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Medical Center?s internal controls over compliance related to reporting of allowable costs was not effective. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Guidance provided for the Provider Relief Fund further states that Provider Relief Fund payments cannot be used to cover costs that are reimbursed from other sources or other sources are obligated to reimburse. Context: The Medical Center receives cost-based reimbursement from Medicare and Medicaid through annually filed cost reports. As a result, allowable costs reported needed to factor in and exclude any amounts that are reimbursed though the annual cost reports. Cause: Changing guidance and interpretations as to what were considered allowable costs per the terms and conditions of the Provider Relief Fund program required constant monitoring of the guidance being posted to the Provider Relief Fund website. HRSA guidance, provided via responses to frequently asked questions, was modified as late as October 26, 2021. Effect: Based on the 2021 Medicare cost report, the Medicare program reimbursed about 41.4% of the Medical Center?s total costs and Medicaid reimbursed about 1.8% of the Medical Center?s total costs, auditor estimated that approximately $229,000 in reported expenses could potentially be reimbursed through the cost reports. The Medical Center incurred additional Covid expenses but did not include them in the portal reporting. Therefore, no funds were estimated to be due back to the Provider Relief Fund. Recommendation: We recommend the Medical Center include in its controls over expenditures of federal awards the process of having an individual familiar with the award periodically review or monitor guidance that may be published by federal grantors. In addition, management should work with HRSA to reopen its reporting portal as this could impact the ability to claim future expenses and/or lost revenue related to future Provider Relief Fund amounts received. View of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.

Finding 2021-005 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Internal Control, Significant Deficiency Compliance Requirement: Procurement Condition: The Medical did not have adequate procurement policies in effect that meet the minimum federal requirements for procurement standards. Criteria: Under Uniform Guidance, the Medical Center is requirement to implement certain written procurement policies that adhere to the minimum federal requirements as outlined at 2.CFR 200.317 through 200.326. Context: During the audit, it was determined that the Medical Center?s procurement policies did not meet minimum federal requirements. Cause: The Medical Center did not have adequate procurement policies in effect that meet the minimum federal requirements and the Medical Center did not review all purchases to ensure compliance with federal requirements. Effect: The Medical Center was not in compliance with 2 CFR 200.317 through 200.326 and as a result did not perform proper procurement procedures over all transactions. Recommendation: We recommend the Medical Center implement policies and procedures that adhere to the minimum procurement requirements as outlined in federal procurement standards 2 CFR 200.317 through 200.326. View of Responsible Officials: The Medical Center will implement policies and procedures to ensure compliance with the requirements as outlined in 2 CFR 200.317 through 200.326.