August 28, 2017

To the Board of Directors and Management

The following represents our understanding of the services we will provide to Tulare Local Health Care District
dba Tulare Regional Medical Center (Tulare).

You have requested that we audit the financial statements of Tulare Regional Medical Center and its discretely
presented component unit, which comprise the statement of net position as of June 30, 2017 and 2016, and the
related statements of revenues, expenses, and changes in net position, and cash flows and for the years then
ended, and the related notes to the financial statements. We are pleased to confirm our acceptance and our
understanding of this audit engagement by means of this letter. Our audit will be conducted with the objective of
our expressing an opinion on the financial statements.

Accounting principles generally accepted in the United States of America (U.S. GAAP), as promulgated by the
Governmental Accounting Standards Board (GASB) require that the managements discussion and analysis be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by GASB, who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our
engagement, we will apply certain limited procedures to the required supplementary information (RSI) in
accordance with auditing standards generally accepted in the United States of America (U.S. GAAS). These
limited procedures will consist primarily of inquiries of management regarding their methods of measurement and
presentation, and comparing the information for consistency with managements responses to our inquiries. We
will not express an opinion or provide any form of assurance on the RSI. The following RSI is required by U.S.
GAAP. This RSI will be subjected to certain limited procedures but will not be audited:

1) Managements Discussion and Analysis

The following other information accompanying the financial statements will not be subjected to the auditing
procedures applied in our audit of the financial statements, and our auditors report will not provide an opinion or
any assurance on that other information.

1) Schedule of Charity Care and Community Support

Auditor Responsibilities

We will conduct our audit in accordance with U.S. GAAS and in accordance with Government Auditing
Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the basic financial statements are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the basic financial statements. The
procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the basic financial statements, whether due to error, misappropriation of assets, or violations of
laws, governmental regulations, grant agreements, or contractual agreements.
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An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of the basic
financial statements. If appropriate, our procedures will therefore include tests of documentary evidence that
support the transactions recorded in the accounts, tests of the physical existence of inventories, and direct
confirmation of cash, investments, and certain other assets and liabilities by correspondence with creditors and
financial institutions. As part of our audit process, we will request written representations from your attorneys,
and they may bill you for responding. At the conclusion of our audit, we will also request certain written
representations from you about the basic financial statements and related matters.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an
unavoidable risk that some material misstatements (whether caused by errors, fraudulent financial reporting,
misappropriation of assets, or violations of laws or governmental regulations) may not be detected exists, even
though the audit is properly planned and performed in accordance with U.S. GAAS and in accordance with
Government Auditing Standards.

In making our risk assessments, we consider internal control relevant to the entitys preparation and fair
presentation of the basic financial statements in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control.
However, we will communicate to you in writing concerning any significant deficiencies or material weaknesses
in internal control relevant to the audit of the basic financial statements that we have identified during the audit.
Our responsibility as auditors is, of course, limited to the period covered by our audit and does not extend to any
other periods.

We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions on
the basic financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for
any reason, we are unable to complete the audit or are unable to form or have not formed opinion(s), we may
decline to express opinion(s) or to issue a report as a result of this engagement.

Compliance with Laws and Regulations

As previously discussed, as part of obtaining reasonable assurance about whether the basic financial statements
are free of material misstatement, we will perform tests of Tulare Regional Medical Centers compliance with the
provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our audit will not
be to provide an opinion on overall compliance and we will not express such an opinion.

The auditors procedures do not include testing compliance with laws and regulations in any jurisdiction related to
Medicare and Medicaid antifraud and abuse. It is the responsibility of management of the entity, with the
oversight of those charged with governance, to ensure that the entitys operations are conducted in accordance
with the provisions of laws and regulations, including compliance with the provision of laws and regulations that
determine the reported amounts and disclosures in the entitys financial statements. Therefore, managements
responsibilities for compliance with laws and regulations applicable to its operations, include, but are not limited
to, those related to Medicare and Medicaid antifraud and abuse statutes.

Other Services

We will prepare the financial statements of Tulare Regional Medical Center in conformity with U.S. generally
accepted accounting principles based on information provided by you. We will also provide other nonattest
services related to preparation of proposed adjusting journal entries. These nonaudit services do not constitute an
audit under Government Auditing Standards and such services will not be conducted in accordance with
Government Auditing Standards.
Management Responsibilities

Our audit will be conducted on the basis that management and, when appropriate, those charged with governance,
acknowledge and understand that they have responsibility:

a. For the preparation and fair presentation of the financial statements in accordance with accounting
principles generally accepted in the United States of America;
b. For the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to error
fraudulent financial reporting, misappropriation of assets, or violations of laws, governmental regulations,
grant agreements, or contractual agreements;
c. To provide us with:
i. Access to all information of which management is aware that is relevant to the preparation and
fair presentation of the basic financial statements, such as records, documentation, and other
matters;
ii. Additional information that we may request from management for the purpose of the audit; and
iii. Unrestricted access to persons within the entity from whom we determine it necessary to obtain
audit evidence.
d. For including the auditors report in any document containing basic financial statements that indicates that
such basic financial statements have been audited by the entitys auditor;
e. For identifying and ensuring that the entity complies with the laws and regulations applicable to its
activities;
f. For adjusting the financial statements to correct material misstatements and confirming to us in the
management representation letter that the effects of any uncorrected misstatements aggregated by us
during the current engagement and pertaining to the current period under audit are immaterial, both
individually and in the aggregate, to the financial statements as a whole; and
g. For maintaining adequate records, selecting and applying accounting principles, and safeguarding assets.

With respect to financial statement preparation services and any other nonattest services we perform including
preparation of proposed adjusting journal entries, Tulare Regional Medical Centers management is responsible
for (a) making all management decisions and performing all management functions; (b) assigning a competent
individual to oversee the services; (c) evaluating the adequacy of the services performed; (d) evaluating and
accepting responsibility for the results of the services performed; and (e) establishing and maintaining internal
controls, including monitoring ongoing activities.

With regard to the supplementary information referred to above, you acknowledge and understand your
responsibility (a) for the preparation of the supplementary information in accordance with the applicable criteria,
(b) to provide us with the appropriate written representations regarding supplementary information, (c) to include
our report on the supplementary information in any document that contains the supplementary information and
that indicates that we have reported on such supplementary information, and (d) to present the supplementary
information with the audited basic financial statements, or if the supplementary information will not be presented
with the audited basic financial statements, to make the audited basic financial statements readily available to the
intended users of the supplementary information no later than the date of issuance by you of the supplementary
information and our report thereon.

As part of our audit process, we will request from management and, when appropriate, those charged with
governance, written confirmation concerning representations made to us in connection with the audit.

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Reporting

We will issue a written report upon completion of our audit of Tulare Regional Medical Centers basic financial
statements. Our report will be addressed to the governing body of Tulare Regional Medical Center. We cannot
provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary
for us to modify our opinions, add an emphasis-of-matter or other-matter paragraph(s), or withdraw from the
engagement.

Other

We understand that your employees will prepare all confirmations we request and will locate any documents or
support for any other transactions we select for testing.

If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you agree
to provide us with printers proofs or masters for our review and approval before printing. You also agree to
provide us with a copy of the final reproduced material for our approval before it is distributed.

Provisions of Engagement Administration, Timing and Fees

During the course of the engagement, we may communicate with you or your personnel via fax or e-mail, and you
should be aware that communication in those mediums contains a risk of misdirected or intercepted
communications.

Kevin Smith is the engagement partner for the audit services specified in this letter. Responsibilities include
supervising services performed as part of this engagement and signing or authorizing another qualified firm
representative to sign the audit report. We expect to begin our audit in September, 2017.

Our fees are based on the amount of time required at various levels of responsibility. Invoices are payable upon
presentation. The final financial statement report will not be issued until all outstanding invoices related to the
fiscal year 2017 audit have been paid. We estimate that our fee for the audit will be $58,500. You will also be
billed for travel and other out-of-pocket costs not to exceed $7,500. Additional time spent assisting or reconciling
accounts that we deem outside the scope of the audit procedures, will be billed at our standard hourly rate. We
will notify you of any circumstances we encounter that could significantly affect this initial fee estimate.
Whenever possible, we will attempt to use Tulare Regional Medical Centers personnel to assist in the preparation
of schedules and analyses of accounts. This effort could substantially reduce our time requirements and facilitate
the timely conclusion of the audit.

In addition, we will be compensated for any time and expenses, including time and expenses of legal counsel, we
may incur in conducting or responding to discovery requests or participating as a witness or otherwise in any
legal, regulatory, or other proceedings as a result of our Firms performance of these services. You and your
attorney will receive, if lawful, a copy of every subpoena we are asked to respond to on your behalf and will have
the ability to control the extent of the discovery process to control the costs you may incur.

Should our relationship terminate before our audit procedures are completed and a report issued, you will be
billed for services to the date of termination. All bills are payable upon receipt. A service charge of 1% per month,
which is an annual rate of 12%, will be added to all accounts unpaid 30 days after billing date. If collection action
is necessary, expenses and reasonable attorneys fees will be added to the amount due.

During the course of the audit, we may observe opportunities for economy in, or improved controls over, your
operations. We will bring such matters to the attention of the appropriate level of management, either orally or in
writing.

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You agree to inform us of facts that may affect the basic financial statements of which you may become aware
during the period from the date of the auditors report to the date the financial statements are issued.

We agree to retain our audit documentation or work papers for a period of at least five years from the date of our
report.

At the conclusion of our audit engagement, we will communicate to the Board of Directors the following
significant findings from the audit:

Our view about the qualitative aspects of the entitys significant accounting practices;
Significant difficulties, if any, encountered during the audit;
Uncorrected misstatements, other than those we believe are trivial, if any;
Disagreements with management, if any;
Other findings or issues, if any, arising from the audit that are, in our professional judgment, significant
and relevant to those charged with governance regarding their oversight of the financial reporting process;
Material, corrected misstatements that were brought to the attention of management as a result of our
audit procedures;
Representations we requested from management;
Managements consultations with other accountants, if any; and
Significant issues, if any, arising from the audit that were discussed, or the subject of correspondence,
with management.

The audit documentation for this engagement is the property of Eide Bailly LLP and constitutes confidential
information. However, we may be requested to make certain audit documentation available to U.S. Department of
Health and Human Services or Medicare and federal agencies and the U.S. Government Accountability Office
pursuant to authority given to it by law or regulation, or to peer reviewers. If requested, access to such audit
documentation will be provided under the supervision of Eide Bailly LLPs personnel. Furthermore, upon request,
we may provide copies of selected audit documentation to U.S. Department of Health and Human Services and
Medicare. The U.S. Department of Health and Human Services and Medicare may intend, or decide, to distribute
the copies of information contained therein to others, including other governmental agencies.

Government Auditing Standards require that we provide, upon request, a copy of our most recent external peer
review report and any subsequent review reports to the party contracting for the audit. Accordingly, we will
provide a copy of our most recent peer review report at your request.

DISPUTE RESOLUTION

The following procedures shall be used to resolve any disagreement, controversy or claim that may arise out of
any aspect of our services or relationship with you, including this engagement, for any reason (Dispute).
Specifically, we agree to first mediate.

Mediation

All Disputes between us shall first be submitted to non-binding mediation by written notice (Mediation Notice)
to the other party. In mediation, we will work with you to resolve any differences voluntarily with the aid of an
impartial mediator. The mediator will be selected by mutual agreement, but if we cannot agree on a mediator, one
shall be designated by the American Arbitration Association (AAA).

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The mediation will be conducted as specified by the mediator and agreed upon by the parties. The parties agree to
discuss their differences in good faith and to attempt, with the assistance of the mediator, to reach an amicable
resolution of the Dispute. Mediation will be conducted with the parties in person in Boise, Idaho.

Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally
by the parties.

Either party may commence suit on a Dispute after the mediator declares an impasse.

Governing Law and Venue

We both agree to submit any unresolved Dispute to trial by a federal or state court venued in Minneapolis,
Minnesota. This agreement shall be governed by and construed in accordance with the laws of the State of
Minnesota (regardless of the laws that might be applicable under the principles of conflict of law) as to all matters
including without limitation, matters of validity, construction, effect, and performance.

LIMITATION OF DAMAGES AND NO PUNITIVE DAMAGES

The exclusive remedy available to you in any adjudication proceeding shall be the right to pursue claims for
actual damages that are directly caused by acts or omissions that are breaches by us of our duties under this
agreement and/or under applicable professional standards, such damages will be limited to no more than two
times fees paid under this agreement. In no event shall we be liable to you for any punitive or exemplary
damages, or for attorneys fees.

TIME LIMITATION

The nature of our services makes it difficult, with the passage of time, to gather and present evidence that fully
and fairly establishes the facts underlying any Dispute. We both agree that, notwithstanding any statute of
limitations that might otherwise apply to a Dispute, it is reasonable that you may not bring any legal proceeding
against us unless it is commenced within twenty-four (24) months (Limitation Period") after the date when we
deliver our report, return or other deliverable under this agreement to you, regardless of whether we do other
services for you or that may relate to the audit.

The Limitations Period applies and begins to run even if you have not suffered any damage or loss, or have not
become aware of the existence or possible existence of a Dispute.

INDEMNITY

You agree that none of Eide Bailly LLP, its partners, affiliates, officers or employees (collectively Eide Bailly)
shall be responsible for or liable to you for any misstatements in your financial statements and/or tax return that
we may fail to detect as a result of knowing representations made to us, or the concealment or intentional
withholding of information from us, by any of your owners, directors, officers or employees, whether or not they
acted in doing so in your interests or for your benefit, and to hold Eide Bailly harmless from any claims, losses,
settlements, judgments, awards, damages and attorneys fees from any such misstatement, provided that the
services performed hereunder were performed in accordance with professional standards, in all material respects.

If a claim is brought against you by a third-party that arises out of or is in any way related to the services provided
under this engagement, you agree to indemnify Eide Bailly LLP, its partners, affiliates, officers and employees
(collectively Eide Bailly), against any losses, including settlement payments, judgments, damage awards,
punitive or exemplary damages, and the costs of litigation (including attorneys fees) associated with the services
performed hereunder provided that the services were performed in accordance with professional standards, in all
material respects.

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ASSIGNMENTS PROHIBITED

You agree that you will not and may not assign, sell, barter or transfer any legal rights, causes of actions, claims
or Disputes you may have against Eide Bailly, its partners, affiliates, officers and employees, to any other person
or party, or to any trustee, receiver or other third party.

Please sign and return the attached copy of this letter to indicate your acknowledgment of, and agreement with,
the arrangements for our audit of the basic financial statements including our respective responsibilities.

We appreciate the opportunity to be your certified public accountants and look forward to working with you and
your staff.

Respectfully,

__________________________
Kevin Smith
Partner

***************************************************************

RESPONSE:

This letter correctly sets forth our understanding.

Acknowledged and agreed on behalf of Tulare Regional Medical Center by:

Name: ______________________________________________________________

Title: ________________________________________________________________

Date: ________________________________________________________________