Holdenville Hospital Authority

Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #731538589 Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Authority does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Authority meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Authority would not be able to draft the Schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Authority?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #731538589 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority claimed expenses attributable to coronavirus, but included expenses before COVID impacted the Authority. Cause: There was turnover of key financial personnel during 2021. The Authority did not have an adequate internal control policy in place to ensure expenses claimed were attributed to COVID. The Authority also did not have a control to ensure the reporting was reviewed and approved by someone other than the preparer (see finding 2021-008). Effect: The Authority claimed and reported expenses that were not attributed to COVID. Questioned Costs: None. While there were $90,538 of known expenses were not attributed to COVID, plus a projected potential $6,941 additional, the Authority had unreimbursed expenses of $101,162, which more than covers the error. Context: A sample of 31 expenditures out of a population of 151 expenses was tested. An error was identified on three of the 31 selections. One of the errors related to expenses prior to COVID impacting the Authority. Accordingly, all expenses prior to the impact of COVID could be identified. The remaining two expenses were projected across the population. The unreimbursed expenses were subject to our testing. Repeat Finding from Prior Years: No Recommendation: We recommend the Authority modify internal control policies to ensure amounts claimed for this program are attributed to COVID. Views of Responsible Officials: Management agrees with the finding.

Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #731538589 Reporting Material Weakness in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority?s eligible expenses claimed and reported under the Provider Relief Fund program was not reviewed and approved by a separate individual outside of the preparer. Cause: The Authority had multiple individuals identifying and compiling eligible costs. In addition, the Authority utilized outside consultants to assist with this process. The Authority did not have an internal control process in place to ensure a review and approval of the report submitted to the Department of Health and Human Services for Period 1 by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenues may be claimed under the program and the report may not be accurately completed. As discussed in Finding 2021-007, certain expenses were reported that should not have been included. Questioned Costs: None. Context: All key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend the Authority implement a control process which includes a documented secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.