OWENSBORO HEALTH, INC.Non-Profit

Finding 2024-001 – Equipment and Real Property Federal Program: Coal Miners Respiratory Impairment Treatment Clinics and Services ALN: 93.965 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2023 through June 30, 2024 Criteria: 2 CFR section 200.313(d)(2) requires a physical inventory of federal property to be taken and the results to be reconciled with the property records at least once every two years. Condition Found, Including Perspective: The System did not conduct a physical inventory of the property purchased with federal funds and reconcile the inventory with the property records in 2024 nor in 2023. Therefore, the System was not in compliance with the applicable federal requirements. Possible Cause and Effect: The System lacks a formalized process to verify the condition and existence of federally funded purchased equipment and the System lacks a formalized process to reconcile these amounts back to the property records. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is not a repeat finding. Recommendation We recommend that management strengthen procedures around performing a physical inventory of the property and reconciling the results at least once every two years. Views of Responsible Officials: Owensboro Health, Inc. concurs with this finding and is working to put procedures in place to perform a formalized physical inventory and a reconciliation of the results on at least a biannual basis.

Finding 2023-001 – Reporting Federal Program: COVID-19 Provider Relief Fund ALN: 93.498 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2022 through September 30, 2022 Criteria: 45 CFR section 75.303 (a) states non-federal entities must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 45 CFR section 75.303 (b) states non-federal entities must: Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. Recipients of provider relief funds must support all expenses with adequate documentation and maintain proper control documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus. Condition Found, Including Perspective: There is no evidence of management’s review of reports submitted to the Health Resources and Services Administration (HRSA) reporting portal prior to their submission to the U.S. Department of Health and Human Services for the Period 3 reporting period. Possible Cause and Effect: While Owensboro Health, Inc. maintains that a management review did occur prior to submission, controls were not designed or implemented effectively to maintain evidence of management’s manual review. Such reviews occurred verbally over phone calls, online meeting platforms, and emails, which were not recorded or retained. A similar finding was communicated in the prior year subsequent to Owensboro Health, Inc. submitting its Period 3 portal reporting to HRSA. Owensboro Health, Inc. remediated the finding concurrent with its Period 4 portal reporting to HRSA. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is a repeat finding. Recommendation We recommend that management continue to monitor its design of management review controls to ensure that documentation of management reviews of federal reports is consistently maintained. Views of Responsible Officials: Owensboro Health, Inc. implemented controls and processes to ensure grant reports are reviewed prior to submission and that evidence of review is maintained. These controls and processes were in place for the Period 4 submission.

Finding 2022-001 ? Reporting Federal Program: COVID-19 Provider Relief Fund ALN: 93.498 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: January 1, 2020 through December 31, 2021 Criteria: 45 CFR section 75.303 (a) states non-federal entities must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government,? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 45 CFR section 75.303 (b) states non-federal entities must: Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. Recipients of provider relief funds must support all expenses with adequate documentation and maintain proper control documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus. Condition Found, Including Perspective: There is no evidence of management?s review of grant reports prior to their submission to the U.S. Department of Health and Human Services.Possible Cause and Effect: While Owensboro Health, Inc. maintains that some manual review did take place prior to submission, controls were not designed or implemented effectively to maintain evidence of management's manual review. Such reviews took place verbally over phone calls, online meeting platforms, and emails, which were not recorded or retained. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is not a repeat finding. Recommendation We recommend that management implement appropriate controls and processes to review the grant reports prior to submission and to provide evidence of the related review. Views of Responsible Officials: Owensboro Health, Inc. will implement controls and processes to ensure grant reports are reviewed prior to submission and that evidence of review is maintained.

Finding 2020-001 Compliance Requirement: Equipment and Real Property Management Federal Agency: U.S. Department of Health and Human Services Program: Coal Miners Respiratory Impairment Treatment Clinics and Services CFDA #: 93.965 Award #: 5 H37RH00049-34-00 Award year: July 1, 2018 through June 30, 2019 July 1, 2019 through June 30, 2020 Criteria 2 CFR section 200.313(d)(2) requires a physical inventory of federal property to be taken and the results reconciled with the property records at least once every 2 years. Condition Found, Including Facts That Support the Deficiency Identified in the Finding and Information to Provide Proper Perspective for Judging the Prevalence and Consequences of the Finding We noted that the System did not conduct a physical inventory of the property purchased with federal funds and reconcile the inventory with property records in 2019 nor in 2020. Therefore, the System was not in compliance with the applicable federal requirements. Cause and Possible Asserted Effect The System lacks a formalized process to verify the condition and existence of federally funded purchased equipment and ensure that these amounts are reconciled back to the property records. Questioned Cost There were no questioned costs associated with the finding. Sampling Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat of a Finding in the Immediately Prior Audit This finding was not a repeat from the prior year. Recommendation The System should strengthen procedures around performing a physical inventory of the property and reconciling the results to the property records at least every two years. View of Responsible Officials The System concurs with this finding and is working to put procedures in place to perform a formalized physical inventory of the property and reconciling the results to the property records at least every two years.

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