IRAAN GENERAL HOSPITAL DISTRICTLocal Government

COVID-19 Provider Relief Fund Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). In addition, management is responsible for establishing and maintaining effective internal control over costs directly and indirectly charged to federal awards. Condition: The District is required to prepare and submit period one provider relief fund reporting 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. Context: We tested the period one report submitted by the District for the year ended June 30, 2021. The District incorrectly included expenses related to construction on a project that was not complete as of June 30, 2021. Questioned costs: $194,217 calculated as the amount of capital expenditures charged to the grant for projects not completed by the end of the period of availability. Effect: Errors were made in reporting expenditures and total expenditures were not accurately reported. Cause: The District did not properly calculate eligible expenses. The District did not identify and reduce gross expenses for amounts related to construction in progress on June 30, 2021. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information and the District should implement additional controls over future reporting periods to help ensure guidance is followed. Views of responsible officials and planned corrective actions: See attached corrective action plan for the District?s response to finding.

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). The District is required to prepare and submit period one 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. The funds cannot be used for expenses reimbursed or obligated to be reimbursed by other sources. In addition, management is responsible for establishing and maintaining effective internal control over costs directly and indirectly charged to federal awards. Condition: The District reported COVID-19-related expenditures within the HHS Provider Relief Fund and American Rescue Plan (ARP) Distribution (PRF) portal that were reimbursed via other sources. Questioned costs: Approximately $1,107,000 calculated as expenses reimbursed by the Paycheck Protection Program and charged to PRF and the estimated cost reimbursement rate not considered in PRF expenditures. Context: The District is certified by Medicare as a critical access hospital. The period one provider relief fund report was tested. The District?s calculation of allowable expenses did not consider the impact of cost reimbursement to reported health care expenses to document that Provider Relief Fund payments were not reimbursed by any other source. Additionally, the District claimed expenses that were covered under Paycheck Protection Program funding. Effect: The Hospital submitted expenses under the PRF program that are obligated to be reimbursed by another source. Cause: The Hospital did not properly calculate eligible expenses. The District did not identify and reduce gross expenses for amounts reimbursed by other sources. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information and the District should implement additional controls over future reporting periods to help ensure guidance is followed. Views of responsible officials and planned corrective actions: See attached corrective action plan for the District?s response to finding.

COVID-19 Provider Relief Fund Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). Condition: The District is required to prepare and submit the period one 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. Questioned costs: None. Context: The period one provider relief fund report was tested. The District selected option 1 to report lost revenues based on quarterly actuals. A material error in the calculation of the patient service revenue for the quarters reported was identified. This included inaccurate monthly patient revenues January 2019-June 2021, materially impacting the quarterly revenues reported. Effect: Errors were made in reporting quarterly total revenue/net charges from patient care for each year, 2019, 2020, and 2021. Lost revenue was under reported. Cause: Internal controls over compliance failed to ensure the District properly calculated net patient service revenue. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions: See attached corrective action plan for the District?s response to finding.