Gunnison Valley HospitalLocal Government

Criteria or Specific Requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement and suspension and debarment. The Organizations should have internal controls designed to ensure compliance with these provisions Condition and Context During our testing over Procurement and Suspension and Debarment, noted the Organizations did not have procedures or controls in place to adequately maintain documentation that bids were obtained for procurement transactions. During our testing over Suspension & Debarment, noted one instance in which the Organizations did not perform the suspension and debarment check prior to entering into a transaction with a vendor. Effect Noncompliance results in possible federal funds being paid to ineligible vendors. Questioned Costs None identified. Cause The Organization lacks a uniform procurement policy that is in compliance with the federal regulations and/or the terms and conditions of the federal award. Recommendation We recommend the Organizations review the procurement policy to ensure it is in line with federal regulations and implement a process to ensure that documentation for bids and sole-source transactions are retained in the Organizations records. Additionally, we recommend the Organization review their process of performing suspension and debarment checks prior to entering into transactions with vendors to ensure all vendors are included in the monthly checks. Views of Responsible Officials Effective February 2026, the Organizations amended and strengthened its existing procurement policy through the implementation of an enterprise-wide Finance Procurement and Vendor Compliance Policy. This updated policy: • Standardizes procurement documentation requirements for all vendors; • Requires documented bid/quote retention and sole-source justification consistent with Uniform Guidance; • Mandates System for Award Management (SAM.gov) verification prior to vendor onboarding and payment; • Centralizes responsibility for exclusion screening and procurement documentation within Accounts Payable and Supply Chain, under CFO oversight; and • Establishes uniform retention and audit-readiness standards. These controls are supported by standardized checklists, documented workflows, and retention requirements, all of which are cross-referenced within the Organizations Finance Policies and Procedures Manual. The policy is fully implemented and operational.

Criteria or specific requirement: According to ?200.303 Internal Controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing we noted the Phase 1 Other PRF Expenses table was completed incorrectly resulting in Gunnison Valley Hospital overclaiming costs against the Provider Relief Fund. The Other PRF Expenses table was completed to include all Provider Relief Fund expenses prior to reimbursement from other sources and then the Unreimbursed Expenses table was completed to be the amount that should have been claimed against the Provider Relief Fund. Questioned costs: $581,014 Context: The costs were identified during allowable cost testing. Cause: Management oversight in completing the Phase 1 Provider Relief Fund reports. Effect: The auditor noted instances of noncompliance. Noncompliance results in possible over charges to the grant. Repeat finding: N/A Recommendation: We recommend the Organizations review the Provider Relief Fund Terms and Conditions and the Frequently Asked Questions to ensure the funds are being used in compliance with the requirements. Views of responsible officials: There is no disagreement with the audit finding. Management?s response: For reporting period 1, Gunnison Valley Hospital (?GVH?) completed the Other PRF Expenses worksheet incorrectly showing the total coronavirus eligible expenses of $1,748,264.67 before applying the Medicare offset of 33.23%. GVH thought this worksheet was just informational and not the amount we were applying to funds received. This resulted in the expenses in the Other PRF Expenses worksheet to be erroneously overstated by $581,013.29. GVH completed the Unreimbursed Expenses Attributable to Coronavirus worksheet thinking this was the net amount of qualifying coronavirus expenses (net of Medicare cost reimbursement as we are a Critical Access Hospital) that was being applied to funds received. GVH reported $1,167,251.38 ($1,748,264.67 minus $581,013.29). GVH discovered this error prior to reporting period 2 for which we properly reflected qualifying coronavirus expenses (net of any Medicare reimbursement) on worksheet Other PRF Expenses and we reported $0 on the Unreimbursed Expenses Attributable to Coronavirus worksheet. Through reporting period 2, GVH does not believe we have overstated qualifying expenses and lost revenue against funds received due to the above error. As of reporting period 2 GVH has $694,485 in unused lost revenue. Applying the $581,013 in over reported expenses in the Other PRF Expenses worksheet in reporting period 1 to the $694,485 in unused lost revenue would still result in GVH having unused lost revenue of $113,472 as of reporting period 2. GVH would like to correct the error in the HRSA reporting system so that it is properly reflected in future reporting periods. We are open to any recommendation by HRSA on how to make the correction. GVH understands the error made in reporting period 1 and has corrected in for reporting period 2 and understand how to report correctly in future reporting periods. We believe this identified material control weakness has been corrected.

Criteria or specific requirement: According to ?200.303 Internal Controls of 2 CFR Part 200, the non-federal entity?s financial management systems, including records documenting compliance with Federal Statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each federal award or program, in accordance with the reporting requirements. Condition: Noted that the Gunnison Valley Hospital and Gunnison Valley Health Senior Care Center Phase 1 Provider Relief Fund reports were incorrectly completed and submitted to HRSA. The Unreimbursed Expenses tables were incorrectly completed to include costs that were claimed in the Other PRF Expenses tables. Questioned costs: None noted. Context: The incorrect reporting was identified in our reporting testing. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in misreporting of funds being claimed against the Provider Relief Fund (i.e., expenses versus lost revenues). Repeat Finding: N/A Recommendation: We recommend that the Organizations create a review process to ensure the Provider Relief Fund reports are accurately completed. Views of responsible officials: There is no disagreement with the audit finding. Management?s response: Gunnison Valley Hospital (?GVH?) and Gunnison Valley Health Senior Care Center (?SCC?) acknowledges that in the Period 1 reporting period we incorrectly reported Unreimbursed expenses on the Unreimbursed Expenses Attributable to Coronavirus worksheet. For GVH we reported $1,167,281 in unreimbursed expenses on this worksheet in error; the worksheet should have had no unreimbursed expenses. For the SCC we reported $194,538 in unreimbursed expenses on this worksheet in error; the worksheet should have had no unreimbursed expenses. For reporting period 2 the Unreimbursed Expenses Attributable to Coronavirus worksheet was completed properly for GVH and the SCC. GVH does not believe this error has resulted in any over statement in funds used through reporting period 2. We would like to correct this error in the HRSA reporting system so that these errors do not cause any overstatement of qualified expenses applied to funds received. We are open to any recommendation by HRSA on how to make the correction. GVH and the SCC understand the error made in reporting period 1 and has corrected in for reporting period 2 and understand how to report correctly in future reporting periods. We believe this identified significant deficiency in internal control has been corrected.