SUMMITSTONE HEALTH PARTNERS

Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2025 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. In addition, 2 CFR 200.214 requires non-Federal entities to ensure that Federal awards are not made to parties that are suspended or debarred. To comply with this requirement, non- Federal entities must have policies and procedures in place to verify vendor eligibility prior to contract award, typically through review of the System for Award Management (SAM) exclusion listings. SummitStone's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. SummitStone does not have a policy that includes suspension and debarment requirements. Condition: During testing of procurement and suspension and debarment, it was noted: a. SummitStone could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $141,846; based on one item below that was tested for procurement and suspension and debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2025 in the amount of $141,846 and noted the above issues. A nonstatistical sampling methodology was used to select the sample. Cause: SummitStone did not have adequate documentation to support SummitStones procurement decisions. Effect: SummitStone did not have adequate internal controls in place which resulted in a purchase without adherence to SummitStone's own procurement policies and the Uniform Guidance. Identification as a repeat finding: This is a repeat finding. See 2024-004. Recommendation: We recommend that SummitStone follow its new procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend following the new policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: SummitStone agrees with the finding. See separate report for planned corrective actions.

Finding: Reporting Assistance Listing No. 93.696 Certified Community Behavioral Health Clinic Expansion Grants Award Year: 2025 Award Number: 5H79SM086677 Criteria: Uniform Guidance 2 CFR §200.302 and §200.328 requires non-federal entities to prepare complete and accurate Federal Financial Reports (FFRs) that reflect allowable costs incurred under the terms of the award and are supported by the entity’s accounting records. Condition: For year tested, the FFR tested has not been prepared accurately. Questioned Costs: None noted. Context: The expenditure line of the report was not completed and the cash receipts included accrued balances. A non-statistical sampling methodology was used to select the sample. Cause: SummitStone did not have internal controls in place to review and detect the error on a timely basis. Effect: The federal expenditures and cash receipts were incorrectly reported to the granting agency. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and document a formal review of Federal Financial Report before report is submitted. Views of responsible officials: SummitStone agrees with the finding. See separate report for planned corrective actions.

Finding: Allowable Activities/Allowable Costs Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2025 Award Number: G757HMWE8ET8 Criteria: Uniform Guidance 2 CFR §200.430 requires that compensation costs charged to federal awards be accurate, allowable, and supported by records that reflect the work performed. Additionally, costs charged must agree to underlying payroll records and be properly allocated to the federal program. Condition: Payroll costs charged to the grant were overstated. Out of 16 payroll selections, two charges to the grant exceeded the underlying payroll register support resulting in a 12.5% error rate, $587 overcharged to the grant. Questioned Costs: $587 based on two selections. Context: Two payroll selections were made with $587 overcharged to the grant. A nonstatistical sampling methodology was used to select the sample. Cause: Payroll charges were recorded to the grant without sufficient review to ensure amounts agreed to approved payroll records prior to charging the federal award. Effect: SummitStone did not have adequate internal controls in place to identify charges to the grant differed from the payroll register. Identification as a repeat finding: This not is a repeat finding. Recommendation: We recommend management implement and document controls to ensure payroll costs charged to federal awards agree to approved payroll records and are reviewed for accuracy prior to being charged to the grant. Views of responsible officials: SummitStone agrees with the finding. See separate report for planned corrective actions.

Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. The Organization's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. Condition: During testing of procurement and suspension & debarment, it was noted: a. Client could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $148,737; based on one item below that was tested for procurement and suspension & debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2024 in the amount of $148,737 and noted the above issues. A non-statistical sampling methodology was used to select the sample. Cause: The Organization did not have adequate documentation to support the Organizations procurement decisions. Effect: The Organization did not have adequate internal controls in place which resulted in a purchase without adherence to the Organization's own procurement policies and the Uniform Guidance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that the Organization follow its procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend updating the policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.

Finding: Reporting and Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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). SummitStone is required to prepare and submit period two 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 and must be eligible COVID-19 related expenses to prevent, prepare for, and respond to coronavirus. In addition, management is responsible for establishing and maintaining effective internal control over costs directly and indirectly charged to federal awards. Condition: SummitStone reported payroll specific extended leave expenditures within the HHS Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution period two report that were unable to be determined to be related to COVID-19. Questioned Cost: $15,055. Questioned costs were determined by obtaining the amount of extended leave charged to the program. Context: Expenses related to an extended leave code in the general ledger system were charged to the program and included in the report but the expenses were not eligible COVID-19 expenses. Out of a sample of 25, 12 items were tested with the extended leave code and all 12 were errors. Effect: Ineligible costs were charged to the program and reported inappropriately in the reporting portal. Cause: SummitStone did not have internal controls to identify specific expenses for amounts related to the payroll extended leave code for the period reported that were eligible COVID-19 expenses. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Policies and procedures over federal grant accounting and reporting should be modified to ensure reports are prepared using complete and accurate information and SummitStone 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 SummitStone?s response to finding.

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