Audit 15006

U.S. Department of Health and Human Services Assistance Living No. 93.498 Provider Relief Funds Criteria: Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No 115-139, 134 Stat. 622 and 623) The Hospital is required to prepare and submit period one provider relief fund report to the U.S. Department of Health and Human Services. This report is to be prepared using accurate financial information and submitted by the deadline established. The funds cannot be used for expenses for projects that are a bundle of services and purchases of tangible items that cannot be separated, such as capital projects, construction projects, or alteration and renovation projects, unless the project was fully completed by the end of Period of Availability associated with the Payment Received Period. Condition: The Hospital’s Provider Relief Fund portal reporting submission and schedule of expenditures of federal awards for PRF included cost deemed to be unallowable of $1,114,902. Also, the Hospital's portal reporting submission included errors in the lost revenue calculation resulting in lost revenues being overstated by $266,223. Questioned Costs: $1,114,902 calculated as the amount of expenditures for a capital project outside the period of availability. Context: The Hospital chose to report lost revenues under the alternative reporting methodology (option iii). Under this option, the Hospital submitted a memo describing its reasonable method of estimated revenues. The methodology described in the memo does not agree with the amounts the Hospital reported in the portal. The Hospital's calculated lost revenue improperly excluded certain patient care revenue. Additionally, there was no documented review of the portal submission workbook prior to portal submission. In addition, the amount of expenses reported in the submission did not agree to the underlying support by $146. The Hospital also included cost for a capital project that was not completed by the deadline required by Provider Relief Fund guidance. Costs of $1,114,902 related to the project were incurred from June 2021 to December 2021, while program guidance required projects to be completed by June 30, 2021. Futhermore, we tested a random sample of 17 expenditures reported under the PRF program from a total of 110 expenditures. One expenditures in the amount of $1,114,902 out of the sample of 17 expenditures was noted to have been incorrectly charged to the program. The sample was not intended to be, and was not, a statistically valid sample. Effect: The report submitted in the portal does not agree to the Hospital's alternative reporting methodology and quarterly lost revenues were improperly reported and unallowable costs were used to support the receipt of Provider Relief funds. Cause: The Hospital's internal controls and grant-related expense review processes were not adequate to detect these reporting errors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend implementing controls to ensure amounts reported are accurate, complete and reviewed. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and recommendation. Management will implement controls to ensure all reports are accurate, complete, and reviewed. Schedules and calculations supporting the amounts included in the submission will be prepared by an appropriately qualified individual and reviewed by a different appropriately qualified individual. The supporting schedules will be printed/reviewed and initialed and dated by both the preparer and reviewer. The reviewed schedules containing the preparers and reviewer’s signed-off initials and dates will be scanned and stored both electronically and in a physical file located in the accounting storage.

U.S. Department of Health and Human Services Assistance Living No. 93.498 Provider Relief Funds Criteria: Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No 115-139, 134 Stat. 622 and 623) The Hospital is required to prepare and submit period one provider relief fund report to the U.S. Department of Health and Human Services. This report is to be prepared using accurate financial information and submitted by the deadline established. The funds cannot be used for expenses for projects that are a bundle of services and purchases of tangible items that cannot be separated, such as capital projects, construction projects, or alteration and renovation projects, unless the project was fully completed by the end of Period of Availability associated with the Payment Received Period. Condition: The Hospital’s Provider Relief Fund portal reporting submission and schedule of expenditures of federal awards for PRF included cost deemed to be unallowable of $1,114,902. Also, the Hospital's portal reporting submission included errors in the lost revenue calculation resulting in lost revenues being overstated by $266,223. Questioned Costs: $1,114,902 calculated as the amount of expenditures for a capital project outside the period of availability. Context: The Hospital chose to report lost revenues under the alternative reporting methodology (option iii). Under this option, the Hospital submitted a memo describing its reasonable method of estimated revenues. The methodology described in the memo does not agree with the amounts the Hospital reported in the portal. The Hospital's calculated lost revenue improperly excluded certain patient care revenue. Additionally, there was no documented review of the portal submission workbook prior to portal submission. In addition, the amount of expenses reported in the submission did not agree to the underlying support by $146. The Hospital also included cost for a capital project that was not completed by the deadline required by Provider Relief Fund guidance. Costs of $1,114,902 related to the project were incurred from June 2021 to December 2021, while program guidance required projects to be completed by June 30, 2021. Futhermore, we tested a random sample of 17 expenditures reported under the PRF program from a total of 110 expenditures. One expenditures in the amount of $1,114,902 out of the sample of 17 expenditures was noted to have been incorrectly charged to the program. The sample was not intended to be, and was not, a statistically valid sample. Effect: The report submitted in the portal does not agree to the Hospital's alternative reporting methodology and quarterly lost revenues were improperly reported and unallowable costs were used to support the receipt of Provider Relief funds. Cause: The Hospital's internal controls and grant-related expense review processes were not adequate to detect these reporting errors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend implementing controls to ensure amounts reported are accurate, complete and reviewed. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and recommendation. Management will implement controls to ensure all reports are accurate, complete, and reviewed. Schedules and calculations supporting the amounts included in the submission will be prepared by an appropriately qualified individual and reviewed by a different appropriately qualified individual. The supporting schedules will be printed/reviewed and initialed and dated by both the preparer and reviewer. The reviewed schedules containing the preparers and reviewer’s signed-off initials and dates will be scanned and stored both electronically and in a physical file located in the accounting storage.