RURAL HEALTH RESOURCES OF JACKSON CO INCNon-Profit

U.S. Department of Agriculture Direct Program: Community Facilities Loans and Grants Cluster - 10.766 Criteria or Specific Requirement - Management is responsible for reporting back to the USDA throughout the life of the loan, as specifically requested within the Hospital's applicable agreement, via the RD 442-2, Statement of Budget, Income, and Equity report, as well as the RD 442-3 , Balance Sheet report. Condition - The Hospital failed to submit its required quarterly reports back to the USDA. Questioned Costs - N/A Context - Out of a population of 8 required quarterly reports (4 RD 442-2 quarterly reports and 4 RD 442-3 quarterly reports), we sampled 4 for testing. Upon making selections and through discussions with management, it was determined none of the required reports were submitted throughout the year. The sample was not, and was not intended to be, a statistically valid sample. Effect - The hospital did not follow the guidelines as laid out in the respective loan agreement for its reporting requirements. Cause - These reports are required to be submitted, as laid out in the applicable loan agreement, however, management did not maintain a list of required reports to be submitted nor was there a tracking mechanism in place to ensure timely filing. Additionally, the reports were never specifically requested throughout the year by the Hospital's USDA representative, nor was the hospital notified of its tardy submission at any point during the fiscal year. Identification as a Report Finding - Not applicable. Recommendation - The Hospital should continue to improve its understanding of the reporting requirements as laid out in the applicable loan document and create a tracking mechanism to ensure reports are submitted in a timely fashion moving forward. View of Responsible Official and Planned Corrective Actions - The Hospital agrees with this finding and will evaluate processes and implement controls surrounding the reporting requirements as laid out by the USDA in the Hospital's loan agreement. The CFO will ultimately be responsible for submitting these reports, as requested.

U.S. Department of Health and Human Services Direct Program: COVID-19 Provider Relief Fund - 93.498 Criteria or Specific Requirement - Management is responsible for establishing and maintaining effective internal control over costs directly and indirectly charged to federal awards. Condition - The Hospital reported COVID-19-related expenditures within the HHS Provider Relief Fund (PRF) portal that were eligible to be reimbursed via other sources. Questioned Costs - $141,793 was the total amount of expenses determined to be over-reported to the federal program. This was calculated by taking the total amount of acceptable expenditures multiplied by the Hospital's internally-calculated Medicare reimbursement rate. Context - Upon testing the compliance requirements of this program, it was determined that a total of two of the six quarters of expenditure items were being reported incorrectly and that they were not "Medicare-affected," as is consistent with existing guidance provided by the U.S. Department of Health and Human Services. Effect - The Hospital submitted expenses under the PRF program that are obligated to be reimbursed by another source. Cause - The guidance provided by HHS to providers across the country as to how to report their COVID-19-related expenses and lost revenues is, at times, difficult to comprehend and apply. The Hospital incorrectly applied guidance. Identification as a Report Finding - Not applicable. Recommendation - The Hospital should continue to improve its understanding of the guidance related to this type of reporting and work with their external advisors to identify areas for improvement prior to submission to the Provider Relief Fund reporting portal. View of Responsible Official and Planned Corrective Actions - The Hospital agrees with this finding, however does note that their remaining COVID-19-related expenses and lost revenues still exceeded the amount of the Provider Relief Fund program money they received. See separate auditee document for planned corrective action.