ASHE MEMORIAL HOSPITAL, INC.

2022-001 Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Provider Relief Funds (PRF) and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Provider Relief Funds are required to be reported through the Provider Relief Fund Reporting Portal and include key line items for Nursing Home Infection Control Expenses, Other Provider Relief Fund Expenses, and Calculation of Lost Revenues Attributable to Coronavirus. Condition: Revenues related to a new payor were excluded from the lost revenue calculation on the AMH Reporting submission. However, the Hospital had sufficient other lost revenues to cover any Provider Relief Funds received. Questioned costs: None Context: During our testing, it was noted that the Organization reported incorrect lost revenues for the Hospital on the reporting submission as they incorrectly excluded some eligible patient revenue. However, the Hospital had sufficient other lost revenues and expenses to cover any Provider Relief Funds received. Cause: Controls were not in place to identify that the reporting submission excluded Hospital revenue. Effect: Information included in the submission could be incorrect and lost revenues could be overstated. Recommendation: We recommend the organization review the lost revenue calculation in future periods to ensure that hospital revenue is evaluated and reported correctly. Views of responsible officials: There is no disagreement with the audit finding.

Department of Health and Human Services Ashe Memorial Hospital, Inc. and Affiliates respectfully submits the following corrective action plan for the year ended December 31, 2022. Audit period: January 1, 2022 through December 31, 2022 The finding from the schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS?FEDERAL AWARD PROGRAMS AUDITS Department of Health and Human Services 2022-001 Provider Relief Funding ? Assistance Listing No. 93.498 Recommendation: We recommend the organization review the lost revenue calculation in future periods to ensure that all hospital revenue is being included in calculation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. While we are not anticipating any future Lost Revenue calculations, we will have this reviewed by our accounting firm if the situation arises. Name of the contact person responsible for corrective action: Charles Wright, CFO Planned completion date for corrective action plan: 9/30/23 If the Department of Health and Human Services has questions regarding this plan, please call Charles Wright, CFO at 336-846-0798.

2021-001 Federal Agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Funds Assistance Listing Number: 93.498 Award Period: January 1, 2021 through December 31, 2021 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Provider Relief Funds are required to be reported through the Provider Relief Fund Reporting Portal and include key line items for Nursing Home Infection Control Expenses, Other Provider Relief Fund Expenses, and Calculation of Lost Revenues Attributable to Coronavirus. Condition: Revenues related to the Mount Jefferson Family Medicine and Orthopedic were reported on the AMH Reporting submission as well as the AFS Reporting submission. However, the Hospital had sufficient other lost revenues and expenses to cover any Provider Relief Funds received. Questioned costs: None Context: During our testing, it was noted that the Organization reported lost revenues for both the Hospital and Clinics on the Hospital reporting submission. However, the Hospital had sufficient other lost revenues and expenses to cover any Provider Relief Funds received. Cause: Controls were not in place to identify that the reporting submission included both Hospital and Clinic revenues and budgets. Effect: Information included in the submission could be incorrect and lost revenues could be overstated. Recommendation: We recommend the organization review the lost revenue calculation in future periods to ensure that hospital and clinic budgets and revenues are evaluated and reported separately. Views of responsible officials: There is no disagreement with the audit finding.

Department of Health and Human Services Ashe Memorial Hospital, Inc. and Affiliates respectfully submits the following corrective action plan for the year ended December 31, 2021. Audit period: January 1, 2021 through December 31, 2021 The finding from the schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS?FEDERAL AWARD PROGRAMS AUDITS Department of Health and Human Services 2021-001 Provider Relief Funding ? Assistance Listing No. 93.498 Recommendation: We recommend the organization review the lost revenue calculation in future periods to ensure that hospital and clinic budgets and revenues are evaluated and reported separately. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. While we agree with the audit finding, we feel it is important to note that the finding had no effect on our overall calculations of relief substantiated. Our corrective action plan includes reducing the Lost Revenue calculation in the Period 3 Portal submission by the $39k of error in our Period 1 Portal submission. As recommended by our auditors, we will review the lost revenue calculation in future periods to ensure that hospital and clinic budgets and revenues are evaluated and reported separately. Name of the contact person responsible for corrective action: Charles Wright, CFO Planned completion date for corrective action plan: 9/30/22 If the Department of Health and Human Services has questions regarding this plan, please call Charles Wright, CFO at 336-846-0798.