Arcare

U.S. Department of Health and Human Services Assistance Listing No. 93.912 Rural Health Care Services Outreach, Rural Health Care Network Development and Small Health Care Provider Quality Improvement Program Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) Condition: The Organization failed to file FFATA reporting submissions for the fiscal year ended December 31, 2023. Questioned Costs: Not Applicable Context: The Organization did not report the subaward information for the 6 subrecipients that received over $30,000 each and approximately $482,000 in total passed through in fiscal year 2023. Effect: The Organization did not report the subaward information as required. Cause: The Organization did not have adequate controls or procedures in place to identify the applicalbe reporting requirements and ensure the information was filed accurately and timely. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend implementing procedures and controls to ensure reporting requirements are monitored and required reports are filed by their respective due dates as required by the grant agreement and Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and recommendation. See separate report for planned corrective actions.

June 24, 2024 Re: Finding No 2023-001 Responsible Party: Talmage J. Whitehead, PresidenUCFO (870) 347-3313, Talmage. Whitehead@arcare.net Expected Completion date: September 2024 Finding No. 2023-001 states: Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the "Transparency Act" that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) Condition: The Organization failed to file FFATA reporting submissions for the fiscal year ended December 31, 2023. Management agrees with the finding. We have conducted the following steps to come into compliance with the Transparency Act: • Wording has been added to Program Monitoring and Data Reporting Systems Policy: ► Grant Program and Financial Management must compile and report data and other information as required by HRSA relating to Subrecipients (FFATA). ► Director of Grant Management will perform the following standard operating procedure for each grant to inform and prevent loss of knowledge for current and future staff members: ► Review and obtain understanding of all guidance and NOA grant terms; ► Relay this information to all grant program and finance staff; ► Assign duties and reporting to appropriate staff; ► Maintain a tracking sheet for grant reporting requirements; ► Confirm all reporting is completed accurately and timely; ► A FFATA data information form will be attached to Subrecipient agreements annually to assist in the reporting requirement; ► Copies of the submissions are maintained in the Department's file to ensure proper compliance documentation is kept. • All grant awards containing subrecipients have been reviewed and data gathered in order to report in the FSRS for 2023. Staff has prepared and filed the late reports for ARcare fiscal year 2023 with exception of one which we are waiting on for more information. We expect to report on this one by September 2024. Those filed were reviewed by Finance. • No awards have been given yet in 2024 so the FSRS reports for 2024 are not due. Awards projected to be given are in September and October 2024 and we intend to be in compliance by reporting deadlines.

U.S. Department of Health and Human Services Federal Assistance Listing Number 93.498 COVID-19 Provider Relief Fund (PRF) American Rescue Plan (ARPA) Rural DistributionCriteria: Reporting (45 CFR 75.342) The Organization is required to prepare and submit period four provider relief fund report to the U.S. Department of Health and Human Services. This report is to be prepared using accurate financial information and submitted by the deadline established. Condition: The Organization incorrectly reported all provider relief payments were applied to unreimbursed expenses attributable to COVID-19 within the peirod four report on the HHS Provider Relief Fund (PRF) portal. Total expenditures reported had not been incurred by the Organization.Cause: The Organization’s internal controls were not adequate to detect reporting errors.Effect or potential effect: Expenses and quarterly lost revenues were improperly reported in the PRF portal.Questioned Costs: Unknown.Context: The Organization inaccurately reported for period four $815,135 of Total Other PRF Expenses. Actual expenses incurred were $304,018. The Organization's calculated lost revenue for period one was reported as $0 but should have reported lost revenues using Option III. The matter was subsequently corrected on September 29, 2023, in the period 5 PRF portal submission.Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend implementing controls to ensure amounts reported are accurate, complete, and reviewed. Additionally, we recommend management submit their lost revenue calculation and narrative to the Health Resources and Services Administration. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective actions.

Responsible Party: Talmage J. Whitehead, President/CFO Email: Talmage.Whitehead@arcare.net Phone Number: (870) 347-3313 Audit Period Ending: December 31, 2022 Audit Firm: Forvis Mazars, LLP Re: Finding No 2022-002 Federal Program: Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Numbers: 93.498 Federal Agency: U.S. Department of Human Services The Organization applied provider relief payments to unreimbursed expenses attributable to COVID-19, instead of lost revenue, in the period four report submitted in the HHS Provider Relief Fund (PRF) portal. Recommendation We recommend implementing controls to ensure amounts reported are accurate, complete, and reviewed. Comments on the Finding and Recommendation Management agrees with this finding and the related recommendation. Action(s) Taken or Planned on the Finding Management will adjust internal control procedures in order to ensure the PRF portal reporting is complete and accurate. The completion date for the above-mentioned corrective action was September 29, 2023.