Audit 14135

FY End
2023-07-31
Total Expended
$1.00M
Findings
2
Programs
1
Year: 2023 Accepted: 2024-01-29
Auditor: Rsm US LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
10471 2023-001 Significant Deficiency - B
586913 2023-001 Significant Deficiency - B

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.00M Yes 1

Contacts

Name Title Type
XC7YUHJSNTV5 Emily Russart Auditee
2626461680 Brian Kirkendall Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Rogers Behavioral Health System, Inc. and Subsidiaries (the Health System) under programs of the federal government for the year ended July 31, 2023. The information in the Schedule 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 Health System, it is not intended to, and does not, present the financial position, changes in net assets, or cash flows of the Health System.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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.
Title: Note 3. Indirect Cost Rate Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance
Title: Note 4. Non-Cash Assistance, Insurance, Loans and Loan Guarantees Outstanding Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Health System did not receive any non-cash assistance during the year ended July 31, 2023. The Health System did not have any federal insurance in effect during the year ended July 31, 2023, nor were there any loans or loan guarantees at year-end.
Title: Note 5. Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Health System did not pass-through federal awards to subrecipients during the year ended July 31, 2023.
Title: Note 6. Provider Relief Fund Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. De Minimis Rate Used: N Rate Explanation: The Health System has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. For the federal awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF) (ALN #93.498), the U.S. Department of Health and Human Services (HHS) has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) PRF Reporting Portal. Payments from HHS for PRF are assigned to Payment Received Periods (each, a Period) based upon the date each payment from the PRF was received. Each Period has a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Period’s deadline to use the funds (i.e., after the end of the Period of Availability). The accompanying Schedule includes $1,004,436 of Period 4 distributions received from HHS between July 1, 2021 through December 31, 2021 reported by the Health System in the HRSA PRF Reporting Portal as used during the corresponding Period of Availability, in accordance with the guidance from HHS. Due to the PRF reporting requirements, these amounts are not the total PRF received and included in other operating revenue in the Health System’s consolidated statements of operations and changes in net assets. PRF distributions recognized in other operating revenue in the Health System’s consolidated statements of operations and changes in net assets were $0 and $1,004,436 during the years ended July 31, 2023 and 2022, respectively.

Finding Details

2023-001 Application of COVID-19 Related Expenses U.S. Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Criteria: Provider Relief Fund (PRF) payments may be applied to eligible COVID-19 related expenses dating back to January 1, 2020, and up to the end of the period of availability based on the date of receipt of funds as prescribed by the U.S. Department of Health and Human Services, so long as they are to prevent, prepare for and respond to coronavirus. Condition: In the internal tracking of eligible COVID-19 related expenses applied to the Period 4 PRF receipts for Rogers Behavioral Health System, Inc. and Subsidiaries (the Health System), the Health System calculated invoice amounts related to legal services incurred as part of the Health System’s response to COVID-19 in a manner that increased legal expenses applied to PRF funds by the percent discount given by legal counsel rather than decreasing legal expenses applies to PRF funds. Calculating the identified eligible legal expenses in this manner occurred for legal expenses incurred and applied to PRF funds from August 2021 to February 2022. Additionally, for one month, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses. Cause: The Health System did not have adequate internal controls in place over the identification and calculation of eligible COVID-19 related expenses applied to PRF funds received. Effect: The Health System applied amounts to PRF funds received for Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. Questioned Costs: $49,559 Context: For 14 of 19 legal expenses selected, the Health System applied amounts to PRF funds received in Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. This application error, which totaled $34,353, was made on all legal expenses identified as eligible expenses for application to PRF funds received for the period from August 2021 to February 2022. Additionally, for the invoice for the month of July 2021, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses, resulting in duplicate applied costs of $15,206. Repeat finding: No Recommendation: We recommend management strengthen internal controls over the accuracy of the internal tracking and calculation of eligible COVID-19 related expenses. Views of responsible officials: Management agrees with the finding and recommendation.
2023-001 Application of COVID-19 Related Expenses U.S. Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Criteria: Provider Relief Fund (PRF) payments may be applied to eligible COVID-19 related expenses dating back to January 1, 2020, and up to the end of the period of availability based on the date of receipt of funds as prescribed by the U.S. Department of Health and Human Services, so long as they are to prevent, prepare for and respond to coronavirus. Condition: In the internal tracking of eligible COVID-19 related expenses applied to the Period 4 PRF receipts for Rogers Behavioral Health System, Inc. and Subsidiaries (the Health System), the Health System calculated invoice amounts related to legal services incurred as part of the Health System’s response to COVID-19 in a manner that increased legal expenses applied to PRF funds by the percent discount given by legal counsel rather than decreasing legal expenses applies to PRF funds. Calculating the identified eligible legal expenses in this manner occurred for legal expenses incurred and applied to PRF funds from August 2021 to February 2022. Additionally, for one month, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses. Cause: The Health System did not have adequate internal controls in place over the identification and calculation of eligible COVID-19 related expenses applied to PRF funds received. Effect: The Health System applied amounts to PRF funds received for Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. Questioned Costs: $49,559 Context: For 14 of 19 legal expenses selected, the Health System applied amounts to PRF funds received in Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. This application error, which totaled $34,353, was made on all legal expenses identified as eligible expenses for application to PRF funds received for the period from August 2021 to February 2022. Additionally, for the invoice for the month of July 2021, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses, resulting in duplicate applied costs of $15,206. Repeat finding: No Recommendation: We recommend management strengthen internal controls over the accuracy of the internal tracking and calculation of eligible COVID-19 related expenses. Views of responsible officials: Management agrees with the finding and recommendation.