FAC Explorer

Audit 13879

FY End
2023-06-30
Total Expended
$1.08M
Findings
4
Programs
1
Organization: Veterans Memorial Hospital (IA)
Year: 2023 Accepted: 2024-01-26
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
10226 2023-004 Material Weakness - L
10227 2023-005 Significant Deficiency - ABL
586668 2023-004 Material Weakness - L
586669 2023-005 Significant Deficiency - ABL

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.08M Yes 2

Contacts

Name Title Type
GAFYNMBJU5F7 Michael Coyle Auditee
5635683411 Ashley Brandt-Duda Auditor
No contacts on file

Notes to SEFA

Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Veterans Memorial Hospital (Hospital) under programs of the federal government for the year ended June 30, 2023. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Hospital, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Hospital. Expenditures reported in the Schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Hospital received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) during the year ended June 30, 2022. The Hospital incurred eligible expenditures (including lost revenue) and, therefore, recognized revenues totaling $872,498 and $201,209 for the years ended June 30, 2023 and 2022 on the financial statements. In accordance with the 2023 Compliance Supplement, the PRF expenditures recognized on the Schedule are based on the reporting to HHS for Periods 4 and 5, defined as payments received during July 1, 2021 to June 30, 2022 of $1,073,707, plus interest earned of $3,887, as required under the PRF program. The amount of PRF expenditures included in the Schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amounts that have been reimbursed or are obligated to be reimbursed by other sources and estimating marginal increases in expenses related to coronavirus. Actual amounts could differ from those estimates.

Finding Details

Finding 2023-004
Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #421030129 Reporting Material Weakness in Internal Control Over Compliance and Material 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. Condition: The Hospital selected option II to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Hospital did not have a budget for the entire reporting period that was approved prior to March 27, 2020. For the periods that the client did not have an approved budget, $0 was entered for net patient revenues even though there were patient revenues for this period. Cause: The Hospital 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. Effect: The reporting to HHS for Period 4 was considered incorrect. The Hospital did not have a budget approved prior to March 27, 2020 for the entire period of availability. The Medical Center reported $0 for quarter 3 and 4 of 2021 and quarters 1, 2, 3 and 4 of 2022. Questioned Costs: None. The Hospital claimed expenses for all Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution amounts in Period 4, so did not use lost revenue to support any of these. Context: Key line items were tested on the Period 4 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital implement procedures to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #421030129 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency 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: The Hospital did not retain evidence of the review and approval of the expenditure listing and lost revenue calculation by a separate individual outside of the preparer. In addition, The Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #421030129 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Hospital did not have an internal control process in place to ensure a secondary review and approval of the expenditure listing, lost revenue calculation, and report submitted to the Department of Health and Human Services for Period 4 was documented. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may be claimed under the program and the special report might not be accurately completed. Questioned Costs: None reported. Context: A nonstatistical sample of 41 expenditures were selected for testing, which accounted for $971,367 of $1,077,594 direct program expenditures. The entire lost revenue calculation was tested, and key line items were tested on the Period 4 HHS report. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Hospital implement a control process which includes a secondary review and approval of the expenditure listing and lost revenue calculation and a secondary review and approval of the required reports to be submitted to the federal agency be documented. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-004
Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #421030129 Reporting Material Weakness in Internal Control Over Compliance and Material 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. Condition: The Hospital selected option II to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Hospital did not have a budget for the entire reporting period that was approved prior to March 27, 2020. For the periods that the client did not have an approved budget, $0 was entered for net patient revenues even though there were patient revenues for this period. Cause: The Hospital 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. Effect: The reporting to HHS for Period 4 was considered incorrect. The Hospital did not have a budget approved prior to March 27, 2020 for the entire period of availability. The Medical Center reported $0 for quarter 3 and 4 of 2021 and quarters 1, 2, 3 and 4 of 2022. Questioned Costs: None. The Hospital claimed expenses for all Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution amounts in Period 4, so did not use lost revenue to support any of these. Context: Key line items were tested on the Period 4 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital implement procedures to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #421030129 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency 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: The Hospital did not retain evidence of the review and approval of the expenditure listing and lost revenue calculation by a separate individual outside of the preparer. In addition, The Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #421030129 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Hospital did not have an internal control process in place to ensure a secondary review and approval of the expenditure listing, lost revenue calculation, and report submitted to the Department of Health and Human Services for Period 4 was documented. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may be claimed under the program and the special report might not be accurately completed. Questioned Costs: None reported. Context: A nonstatistical sample of 41 expenditures were selected for testing, which accounted for $971,367 of $1,077,594 direct program expenditures. The entire lost revenue calculation was tested, and key line items were tested on the Period 4 HHS report. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Hospital implement a control process which includes a secondary review and approval of the expenditure listing and lost revenue calculation and a secondary review and approval of the required reports to be submitted to the federal agency be documented. Views of Responsible Officials: Management agrees with the finding.