EXCELSIOR WELLNESS

U.S. Department of Health and Human Services Certified Community Behavioral Health Clinics Assistance Listing #93.696 Matching, Level of Effort, Earmarking Significant Deficiency in Internal Control over Compliance and Noncompliance Grant Award Number: 5H79SM086922-02 2023-002 U.S. Department of Health and Human Services Certified Community Behavioral Health Clinics Assistance Listing #93.696 Matching, Level of Effort, Earmarking Significant Deficiency in Internal Control over Compliance and Noncompliance Grant Award Number: 5H79SM086922-02 Criteria – A complete system of internal control contemplates an adequate system for tracking level of effort of designated personnel as prescribed in Notice of Award from U.S. Department of Health and Human Services. OMB require official written policy outlining responsibilities for determining required amounts or limits for level of effort, calculations for level of effort (including in-kind), and methods of accounting for and documentation of level of effort. Condition – Excelsior did not timely submit notice to granting agency of change in evaluator, as required by award. Cause – Due to cost constraints and the limited size of staff, Excelsior did not follow their policies or controls for communicating change in evaluator to granting agency. Effect – Excelsior could be out of compliance with the terms of the award. Questioned Costs – None reported Context/Sampling – All job functions/employees named in the award tested Repeat Finding from Prior Year – No Recommendation – We recommend Excelsior implement revised policies and documentation for segregated responsibilities for level of effort requirements. Views of Responsible Officials – Management agrees with the finding.

2021-003 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN 911189908 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance; 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. Excelsior selection Option ii to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. Condition: Excelsior used a budget in the calculation of lost revenue in Quarters 1, 2, 3, and 4 of calendar year 2020 that was approved prior to March 27, 2020. Excelsior then used the calendar year 2021 budget that was not approved prior to March 27, 2020, in the calculation of lost revenue for Quarters 1, 2, 3, and 4 of calendar year 2021. Cause: Excelsior did have an approved budget prior to March 27, 2020, for fiscal year 2020, but the approved budget did not cover the entire period of availability. Excelsior did not have an adequate internal control policy in place to ensure the lost revenue calculation followed the terms and conditions of the federal program. Effect: The lack of adequate policies governing the lost revenue calculations increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 2 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend that Excelsior implement procedures to ensure the lost revenue calculation used and submitted to the Department of Health and Human Services meets the terms and conditions of the federal program. Views of Responsible Officials: Management agrees with the finding.

2021-004 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN 911189908 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance for Reporting 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. Condition: Excelsior claimed all lost revenue related to Quarter 1 2020 which included lost revenue that existed prior to the pandemic impacting the operations of Excelsior. The terms and conditions of the federal award require that the lost revenue be attributable to coronavirus. Cause: Excelsior did not have an internal control process in place to document their conclusions of which periods were impacted by the pandemic and ensure the lost revenue calculations were accurate. Effect: The lost revenue calculation is not correct which resulted in the Department of Health and Human Services Period 2 special report to contain errors. Questioned Costs: Approximately $372,000 of additional lost revenue was reported in the Department of Health and Human Services Period 2 special report. This error did not result in any questioned costs as Excelsior reported nearly $3 million of additional lost revenue than what was received in funding under the federal award. Context/Sampling: The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 2 Department of Health and Human Services special report. Quarter 1 2020 was bifurcated to only report one month as lost revenue. Repeat Finding from Prior Year: No Recommendation: We recommend that Excelsior implement procedures to ensure the lost revenue calculation used and submitted to the Department of Health and Human Services meets the terms and conditions of the federal program. Views of Responsible Officials: Management agrees with the finding.

2021-005 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN 911189908 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance for Reporting 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. Condition: Excelsior?s lost revenue calculation did not include bad debt expense in either the actual revenue reported, or the budgeted revenue reported, which does not follow the terms and conditions of the federal award. Cause: Excelsior did not have an internal control process in place to ensure the lost revenue calculations were accurate. Effect: The lost revenue calculation is not correct which resulted in the Department of Health and Human Services Period 2 special report to contain errors. Questioned Costs: The lost revenue that was reported in the Department of Health and Human Services Period 2 special report was understated by approximately $660,000. This error did not result in any questioned costs as lost revenue was understated. Context/Sampling: The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 2 Department of Health and Human Services special report. Repeat Finding from Prior Year: No Recommendation: We recommend that Excelsior implement procedures to ensure the lost revenue calculation used and submitted to the Department of Health and Human Services meets the terms and conditions of the federal program. Views of Responsible Officials: Management agrees with the finding.

2021-006 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN 911189908 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance 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. Condition: There was no evidence of formal review and approval for the calculations of lost revenue. In addition, no evidence was retained that Excelsior?s Department of Human Services Period 2 special report was reviewed by an individual outside of the preparer prior to submission. Cause: Excelsior did not have an adequate internal control policy to ensure documented review and approval of the lost revenue calculation, or the Department of Human Services Period 2 special report was retained. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 2 Department of Health and Human Services special report. Repeat Finding from Prior Year: No Recommendation: We recommend that Excelsior enhance internal control policies to ensure that forma documentation of review and approval is obtained and retained. Views of Responsible Officials: Management agrees with the finding.