PUGET SOUND KIDNEY CENTERS

Finding 2021-001: Reporting ? Significant Deficiency in Internal Control Over Compliance Federal Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program (Assistance Listing #93.498) Federal Agency: U.S. Department of Health and Human Services Award Year: Payment Received Period: Period 1: April 10, 2020 to June 30, 2020 Criteria: 2021 Compliance Supplement and 2 CFR 200.512 requires data collection forms be completed and submitted within the earlier of 30 days after receipt of the auditor's reports, or nine months after the year end of the audit period. Condition and Context: The Organization needed additional time to prepare for the program specific audit and the Organization?s auditor needed additional time to complete the audit, as such, the Organization did not meet the reporting deadline of September 30, 2022. Cause and Effect: While the Organization was aware of the reporting deadline, additional time to prepare for and complete the audit was needed, which led to the Organization not meeting the related reporting requirements. Identification of a Repeat Finding: This is not a repeat finding. Questioned Costs: Not applicable. Recommendation: We recommend that the Organization?s management implement policies and procedures to ensure the Organization is prepared for an audit to be performed with sufficient time to complete the audit prior to the required deadline. Views of Responsible Officials: Management agrees with finding. Management has taken steps to upgrade and strengthen existing policies and procedures. Management will ensure that future audit reviews are planned well in advance of deadlines and there will be a written commitment between management and the auditors about timely allocation of human resources and planned list of documentation, information and support necessary to comply with rules, regulations, or other commitments.

Finding 2021-002: Allowable Cost Principles ? Significant Deficiency in Internal Control Over Compliance Federal Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program (Assistance Listing #93.498) Federal Agency: U.S. Department of Health and Human Services Award Year: Payment Received Period: Period 1: April 10, 2020 to June 30, 2020 Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that 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 terms and conditions of the federal award. Condition: As a result of audit procedures, we noted that the invoice support on 5 out of 63 invoices, totaling $135.51 or 5.7% of tested incremental supplies expenses, could not be located by management with reasonable effort and management determined it was administratively burdensome to extend search efforts. Total healthcare related supplies expense reported by the Organization were $132,344.15. Based on tested incremental supplies expenses, extrapolation of missing invoice support would be approximately $7,500. Context: Based on procedures performed, we noted that the Organization's document retention policies and procedures did not provide for adequate retention of records in accordance with the terms and conditions of the grant. Cause and Effect: The Organization did not have proper controls in place to ensure that the documentation of expenditures expensed to the grant were retained and easily located. Identification of a Repeat Finding: This is not a repeat finding. Questioned Costs: None. Recommendation: We recommend that the Organization?s management implement policies and procedures to ensure document retention and retrieval meets the standards required in the terms and conditions of the grant. Views of Responsible Officials: Management agrees with finding. Management has taken steps to upgrade and strengthen existing policies and procedures. Management will allocate additional designated secured space for archive, facility, shelving, and control for all documents that are required to be stored as statutorily required.