2025-665-E-Health Dept-Forvis-Prepare analysis of 2024-25 Cost Report

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Orange County Health Department July 28, 2025 Page 5 Cost Report Preparation While cost report preparation involves assembly of information in a financial statement format, that information is solely for cost report purposes and should not be used for any other purpose. Our services will be limited to presenting, in the form prescribed by the Centers for Medicare & Medicaid Services (CMS), information that is the representation of management. Management will be responsible for posting any accounting entries determined to be needed as part of the cost report preparation process. Our engagement is not designed to prevent or detect and cannot be relied upon to prevent or detect fraud, abusive acts, errors, and omissions including, but not limited to: • Nonallowable costs that you have not identified or that are misclassified or combined in another account • Insufficient underlying documentation to support the information you have provided to us • Billing errors including coding errors, billing for noncovered services, and improper bundling or unbundling of charges • Insufficient medical records documentation of physician orders, medical necessity of services, or performance of services • Inappropriate physician arrangements including payments for referrals or contracts that do not comply with the laws commonly known as the “Stark” or “anti-kickback” laws • Misstatements that might exist due to fraudulent financial reporting or misappropriation of assets • Failure to comply with the Medicare and Medicaid conditions of participation • Failure to comply with the Internal Revenue Code and related regulations • Related-party costs that you have not disclosed to us Cost reports are subject to review by administrative contractors and others with oversight responsibility. Professional judgment is used in resolving questions where the cost report and reimbursement rules and regulations are unclear. You understand that reviewers may choose to interpret rules and regulations in a manner different than that reflected in the cost reports, and reviewers may propose adjustments to your cost reports which could have an adverse effect on your cost report settlements. Management acknowledges and understands their responsibility for the following: • Providing data in a summarized concise manner so that Forvis Mazars does not incur significant additional time manipulating information into a format usable for this engagement • Overseeing these services by designating an individual possessing suitable skill, knowledge, and/or experience to oversee the engagement • Evaluating the adequacy and results of the services performed and accepting responsibility for the results of such services • Establishing and maintaining effective internal control over financial reporting • Setting the proper tone • Creating and maintaining a culture of honesty and high ethical standards • Establishing appropriate controls to prevent, deter, and detect fraud, illegal acts, and noncompliance with laws and regulations • Submission of the cost report(s) and any related materials to the state of North Carolina is your responsibility. You are responsible for the information submitted, including sole responsibility for the accuracy and completeness of such information. You will be responsible for signing the NC Medicaid signature page of the Medicaid cost report. If you identify any errors or discrepancies in the submissions, it is your responsibility to notify us to discuss resolution options. • Notifying us timely and, as applicable, providing us copies of any correspondence received by you from regulators regarding the cost report Docusign Envelope ID: E500264A-3A6C-4488-BAC2-EF954B7A1021