HORIZON HEALTH AND WELLNESS, INC.Non-Profit

Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #860554593 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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. The Organization selected Option iii to calculate lost revenue, which consists of utilizing an alternative reasonable method. Condition ‐ The Organization selected option iii to calculate lost revenue using budgeted gross revenues to actual gross revenues. The Organization’s HHS Period 4 Report included lost revenues for three quarters that did not agree to the supporting calculation of lost revenues. Cause ‐ The budgeted amounts were updated after the HHH Period 4 Report was submitted. Those changes decreased the budgeted amounts for three quarters in 2022 resulting in lost revenues being under‐reported by $278,644. Effect ‐ The Organization understated the amount of lost revenues claimed in the HHS Period 4 Report by $278,446. While the Organization had an error in the total amount of lost revenues reported, the Organization has unused lost revenues of $4,563,025. Should the lost revenue reported by the Organization be corrected, the unused lost revenues would be $4,841,669. Questioned Costs ‐ None reported. Context ‐ Lost revenue was tested for all twelve quarters included in the HHS Period 4 Report. Three of the quarters had lost revenues which were reported incorrectly (Quarters 1, 2, and 3 in 2022). Repeat Finding from Prior Years ‐ No Recommendation ‐ We recommend that the Organization enhance internal control policies over the budget to ensure that the lost revenue calculation is not changed after submission and follows the Option iii methodology utilized to calculate lost revenues. Views of Responsible Officials ‐ Management agrees with the finding.

2022-001 Federal Communications Commission Federal Financial Assistance Listing/Federal CFDA #32.006 COVID-19 Telehealth Program Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria ? Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Sections 200.318 through 200.326 set forth the procurement, suspension and debarment standards non-federal entities other than states must follow when operating federal programs and the procurement, suspension and debarment procedures required depending on the dollar amount of the transaction. In addition, the Uniform Guidance requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Condition ? During the course of our engagement, we identified that there was no observable procurement policy or suspension and debarment policy to indicate that the required procurement, suspension and debarment procedures were performed on vendors. There is a purchasing policy; however, the purchasing policy does not contain all of the required elements identified in the Uniform Guidance. The purchasing policy does require three quotes are obtained for purchases exceeding $50,000; however, the Small Purchase Threshold within Uniform Guidance requires that an entity obtain and document a reasonable number of quotes (defined as three) for purchases between $10,000 and under $250,000. Discussions with management noted that suspension and debarment procedures occurred, but there is no retained documentation of those procedures, nor are the suspension and debarment procedures updated periodically. Cause ?The Organization did not have adequate internal controls to ensure the procurement policy and the suspension and debarment policy were in place and contained all of the applicable provisions prior to entering into all covered transactions. Effect ? A lack of established policies increases the overall risk that the Organization is contracting and awarding contracts which may not be the most cost advantageous to the Organization or that the Organization may be contracting with suspended or debarred vendors. Questioned Costs ? None reported Context/Sampling ? The Organization did not have a procurement policy or a suspension and department policy, so no review could be done. In addition, the Organization did not retain supporting documentation that management completed suspension and debarment procedures before entering covered transactions. Repeat Finding from Prior Year ? No Recommendation ? We recommend that management implement a procurement policy that conforms to the requirements contained in the Uniform Guidance as well as contains the applicable provisions described in Appendix II to Part 200, which include administrative, contractual, or legal remedies in instances where contractors violate or breach terms. In addition, we recommend that management implement a suspension and debarment policy to ensure the Organization does not contract with suspended or debarred vendors, including a requirement to retain the documentation of these procedures. Views of Responsible Officials ? Management agrees with the finding.

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