HALE COUNTY HOSPITALLocal Government

Finding 2022-002 – COVID-19 Provider Relief Fund – Assistance Listing Number 93.498 – Lack of Documentation of Review (Material Weakness) Criteria: The Hospital should have a review process in place that includes documentation of review in accordance with 45 CFR 75.342. Condition: The Hospital could not produce evidence of approval of payroll expenditures related to reimbursement under the Provider Relief Fund. Total personnel expenses reported in the Period 2 filing were $657,454. Cause: Payroll expenses selected for testing did not have evidence that the expenditure had been approved. Effect: Payroll expenses tested did not have a documented approval. Questioned Costs: None. Repeat Finding: This is a repeat finding. Recommendation: Policies and procedures should require the documentation of approval of expenses prior to payment. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.

Finding 2022-003 – COVID-19 Provider Relief Fund – Assistance Listing Number 93.498 – Reporting (Material Weakness) Criteria: The Authority should have appropriate internal controls in place to ensure that the reporting requirements are met, and that amounts utilized in the reports are reported accurately and in accordance with 45 CFR 75.342. Condition: The Period 2 Provider Relief Fund (PRF) report submitted during the year ended September 30, 2022, was tested. Certain expenses identified by management for reimbursement lacked proper support, including 3 expenses totaling $2,210. However, the Hospital had sufficient other eligible COVID related expenses to substitute for the unsupported expenses. As a result, the Hospital incorrectly reported a portion of eligible expenses in the wrong quarter and the wrong expense classification on the Period 2 PRF report. Cause: Certain expenses reported lacked sufficient supporting documentation. Effect: Errors were made in the reporting of quarterly COVID expenses on the Period 2 PRF. However, there was no impact to total funding received or retained by the Hospital due to the error. The total amount of COVID expenses reported for the Period 2 PRF was accurate, and the amount reported per the schedule of expenditures of federal awards was also accurate. Questioned Costs: None. Repeat Finding: This is a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure amounts are reported accurately. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.

Finding 2022-004 – Reporting (Late Filing) – Significant Deficiency Criteria: Section 200.507 of the Uniform Guidance states that the single audit shall be completed, and required reporting submitted within the earlier of 30 calendar days after receipt of the auditors’ report, or nine months after the end of the fiscal year. Condition: The Hospital did not complete and submit its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit and lack of internal controls, the Hospital was not in compliance with the reporting requirement. Questioned Costs: None. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the Hospital complete its audits and submit the required reports by the deadline. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.

Criteria: The Hospital should have a review process in place that includes documentation of review in accordance with 45 CFR 75.342. Condition: The Hospital could not produce evidence of approval of payroll expenditures related to reimbursement under the Provider Relief Fund. Total personnel expenses reported in the Period 1 filing were $828,794. Cause: Payroll expenses selected for testing did not have evidence that the expenditure had been approved. Effect: Payroll expenses tested did not have a documented approval. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: Policies and procedures should require the documentation of approval of expenses prior to payment. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.

Criteria: The Authority should have appropriate internal controls in place to ensure that the reporting requirements are met, and that amounts utilized in the reports are reported accurately and in accordance with 45 CFR 75.342. Condition: The Period 1 Provider Relief Fund (PRF) report submitted during the year ended September 30, 2021, was tested. Certain expenses identified by management for reimbursement were for ineligible expenses, including 12 expenses totaling $10,700 incurred prior to COVID and 26 duplicate expenses totaling $17,084. However, the Hospital had sufficient other eligible COVID related expenses to substitute for the ineligible expenses. As a result, the Hospital incorrectly reported a portion of eligible expenses in the wrong quarter and the wrong expense classification on the Period 1 PRF report. Cause: Certain expenses reported were not reported in the proper quarterly period and the type of expense was misclassified. Effect: Errors were made in the reporting of quarterly COVID expenses on the Period 1 PRF. However, there was no impact to total funding received or retained by the Hospital due to the error. The total amount of COVID expenses reported for the Period 1 PRF was accurate, and the amount reported per the schedule of expenditures of federal awards was also accurate. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure amounts are reported accurately. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.

Criteria: Section 200.507 of the Uniform Guidance states that the single audit shall be completed, and required reporting submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the fiscal year. Condition: The Hospital did not complete and submit its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit and lack of internal controls, the Hospital was not in compliance with the reporting requirement. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Hospital complete its audits and submit the required reports by the deadline. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and is in the process of implementing the recommendations.