CLIFTON-FINE HEALTH CARE CORPORATION

2022-002 ? Lost Revenue Reporting ? Compliance Finding U.S. Department of Health and Human Services: Provider Relief Fund and American Rescue Plan (ARP) Rural Distributions (Federal Assistance Listing Number 93.498) Criteria: Under the terms and conditions of the awards, accurate amounts that agree with the entity's financial records are required to be reported in the Provider Relief Fund report. Condition: The Period 4 Provider Relief Fund report was submitted on March 31, 2023 during the financial statement audit for the year ending December 31, 2022. The Hospital reported actual revenues for 2022 in the Provider Relief Fund report that were not accurate and do not agree to audited financial statements. Context: This finding appears to be an isolated instance. Effect: The actual revenue for 2022 was understated by $2,433,204 within the Provider Relief Fund report, which resulted in an overstatement of lost revenue to be claimed in future periods by the same amount. The reporting did not impact the PRF funding received and retained by the Hospital due to the error. Cause: Adjustments were made during the audit in conjunction with management that impacted the actual 2022 net patient service revenue, after the reporting to HRSA for period 4. Recommendation: We recommend the Hospital update the revenue data for 2022 actual revenue in future HRSA PRF reporting periods.

Finding #2022-002 Response: We agree with the finding noted by the auditors. Timing of the submission of the HRSA report and completion of the 2022 audit caused the difference. The 2022 revenue data will be corrected in future period reporting. Responsible Party: Maxine Briggs, CFO Estimated Completion: 12/31/23

2021-003 ? Unapproved Budget Revenues included in Lost Revenue Calculation ? Significant Deficiency in Internal Control over Compliance U.S. Department of Health and Human Services: Provider Relief Fund and American Rescue Plan (ARP) Rural Distributions (Federal Assistance Listing Number 93.498) Criteria: Under the terms and conditions of the awards, the recipient certifies it will include only budgeted revenues approved prior to March 27, 2020, for the entire period of availability, in its calculation of lost revenues. Condition: The Hospital selected Option 2 for their reporting method in Period 1 reporting. The Hospital used its 2020 budget which was approved prior to March 27, 2020, for its calendar year 2020 lost revenues calculation; however, the 2020 budget didn?t cover the entire period of availability for Period 1. The Hospital used their 2021 budget for the remaining period of availability (through June 30, 2021), which was not approved prior to March 27, 2020, in their calculations of lost revenues for the calendar year 2021, in its reporting of the Provider Relief Fund to the Health Resources and Services Administration. Context: This finding appears to be an isolated instance. Effect: The use of the 2021 budget did not have an effect on the Provider Relief Funds the Hospital retained based on the Period 1 reporting. Cause: The Hospital mis-interpreted the most recent instructions related to reporting as of the required filing date. Recommendation: We recommend the Hospital change its lost revenue reporting method to Option 3 in the next reporting, which allows for any reasonable method. This could include budgeted revenues approved after March 27, 2020 to be used in the lost revenue calculation for calendar year 2021 and 2022. Views of Responsible Official: See management?s Corrective Action Plan.

Finding #2021-003 Response: We agree with the concerns raised by the auditors. We will update the methodology for lost revenue calculations and change our lost revenue option to Option 3, ?any reasonable method of estimating revenues,? during the Period 4 reporting period. Responsible Party: Maxine Briggs, CFO Estimated Completion: 9/30/2022