Cumberland County Hospital System, Inc.

Federal Agency: United States Department of Agriculture Federal Program Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Type of Finding: Significant Deficiency in Internal Control over Compliance Period: October 1, 2021 ? September 30, 2022 Condition: The management did not have proper internal controls in place to ensure all investments are backed by the full faith and credit of the United States. Additionally, management did not have internal controls in place to ensure investment valuation is monitored to ascertain debt service reserve fund is at least 90% of the debt service reserve requirement. Criteria or specific requirement: The USDA Debt agreement requires that investment valuation be made by management twice a year to ensure debt service reserve fund is at least 90% of the debt service reserve requirement. Additionally, compliance requirement requires funds to be deposited in institutions insured by the state or federal government or invested in readily marketable securities backed by the full faith and credit of the United States. Effect: A lack of internal controls over these requirements cause the reserve balance to be potentially underfunded as well as the funds to be invested in securities that are not backed by the full faith and credit of the United States. Questioned costs: None Cause: The Cumberland County Hospital System did not have internal controls in place to ensure all investments are backed by the full faith and credit of the United States. Additionally, management did not have proper internal controls in place to ensure investment valuation is monitored to ascertain adequate debt reserve balance is maintained. Recommendation: We recommend management ensure that they have a process in place to ensure all investments are backed by the full faith and credit of the United States. Additionally, management should have proper internal controls in place to ensure investment valuation is monitored to ascertain adequate debt reserve balance is maintained in accordance with related USDA debt agreement. Views of responsible officials: The management will have all mutual funds sold and will deposit $290,000 into the debt reserve account to fully fund the balance to equal one payment.

2021?001 Federal Agency: N/A Federal Program Title: N/A Federal Assistance Listing Number: N/A Type of Finding: Material Weakness over Compliance and Internal Control over Compliance Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with various grant provisions. The Health System should have internal controls in place designed to ensure compliance with those provisions. Condition: The Health System did not have internal controls in place to ensure compliance with grant requirements. In particular, the Health System did not have processes in place to monitor its audit and compliance reporting requirements under the grant. Questioned costs: None Context: The Health System became aware through preparation of the fiscal year 2021 schedule of expenditures of federal awards, that they incurred federal award expenditures in excess of $750,000 for fiscal year 2020, thus requiring an audit in accordance with the Uniform Guidance. Cause: The Health System did not have internal controls in place to ensure required external reporting occurred based on its level of federal award expenditures. Effect: An audit in accordance with the Uniform Guidance was not completed and filed with the Federal Audit Clearinghouse. Recommendation: We recommend management ensure they have a process in place to track their audit and reporting requirements and to ensure compliance with these Uniform Guidance. Views of responsible officials: We are in agreement with this finding. The finance team has had many additional demands and responsibilities as a result of the COVID-19 pandemic and subsequent surges. In addition, there was a transition of audit firms during this timeframe. The responsibility of summarizing federal award expenditures was not specifically assigned at the time, and therefore was not timely addressed. We have established a process whereby this responsibility has been specifically assigned so that federal award expenditures will be determined timely, and the Health System will comply with reporting requirements under the Uniform Guidance in the future. We are working with our current auditors and will have the 2020 single audit completed by September 30, 2022.

2021?002 Federal Agency: Department of Health and Human Services Federal Program Title: COVID-19 HRSA Uninsured Program Federal Assistance Listing Number: 93.461 Type of Finding: Significant Deficiency over Compliance and Internal Control over Compliance Condition: The Health System received reimbursement for testing of uninsured patients however it was later determined that those patients were insured. Criteria or specific requirement: Funds for reimbursement are for the cost associated with COVID-19 testing and testing-related items for individuals who did not have any health care coverage at the time of service. Effect: Noncompliance with the federal requirements around the determination of uninsured patients. Questioned Costs: $800 Cause: The Health System controls around the determination of a patient?s insurance status were not operating effectively. Recommendation: We recommend that the Health System review the submissions to HRSA to ensure that the patients they requested reimbursement for were in fact uninsured. Views of responsible officials and planned corrective actions: At the time of service, the two accounts in noncompliance were deemed as being uninsured. In one instance we were unable to electronically verify insurance. Our secondary means is to verbally verify with the patient. This was documented in their records.

2020?001 Federal Agency: N/A Federal Program Title: N/A CFDA Number: N/A Type of Finding: Material Weakness over Compliance and Internal Control over Compliance Condition: The Health System did not have internal controls in place to ensure compliance with grant requirements. In particular, the Health System did not have processes in place to monitor its audit and compliance reporting requirements under the grant. Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with various grant provisions. The Health System should have internal controls in place designed to ensure compliance with those provisions. Questioned costs: None Context: The Health System became aware through preparation of the fiscal year 2021 schedule of expenditures of federal awards, that they incurred federal award expenditures in excess of $750,000 for fiscal year 2020, thus requiring an audit in accordance with the Uniform Guidance. Cause: The Health System did not have internal controls in place to ensure required external reporting occurred based on its level of federal award expenditures. Effect: An audit in accordance with the Uniform Guidance was not completed and filed with the Federal Audit Clearinghouse. Recommendation: In response to the fiscal year 2021 audit finding 2021-001 management agreed to complete the 2020 audit in accordance with the Uniform Guidance by September 30, 2022. We recommend management ensure they have a process in place to understand their audit and reporting requirements and to ensure compliance with these requirements.