Community Health Network, Inc., Had Significant Liabilities On December 31, 2011

During calendar years 2009 and 2010, Community Health Network, Inc. (CHN), a nonprofit corporation located in Savannah, Tennessee, received $3.2 million in grants from the Health Resources and Services Administration (HRSA). Of the $3.2 million CHN received, $2.1 million was awarded under the American Recovery and Reinvestment Act of 2009.

CHN had sufficient financial and human resources to complete the requirements of its HRSA grants. However, CHN had significant liabilities, in excess of $1 million, that could affect its ability to pay its recurring expenses in the future. Furthermore, CHN charged approximately $5,000 in unallowable costs to its Telehealth Network Program grant. These conditions were attributable to CHN's inadequate internal controls, including a lack of segregation of duties, to properly manage income and expenses.