Audit 15646

Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution – Assistance Listing No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) and Reporting (45 CFR 75.342) Condition – Within the Provider Relief Fund Reporting Portal for Period 4, the Organization reported other Provider Relief Fund (PRF) expenses and lost revenues calculated using option iii. The option iii narrative stated that management "evened out any one-time journal entries made in one quarter that should have been spread evenly throughout a year." Additionally, the narrative stated "After backing these items out, we felt like we had an apples-to-apples comparison to get a true picture of our lost revenue." However, instead of spreading incentive revenue out over the period to which it related, it was excluded from all reporting periods within the lost revenues calculation. Questioned Costs – Unknown Context – The Period 4 PRF report was tested. Management excluded all incentive revenue from patient service revenue but did not state that it was doing so in the narrative supporting its option iii lost revenues calculation. Effect – Lost revenues attributable to coronavirus, as reported in the Period 1 PRF report, were overstated. Cause – As permitted by U.S. Department of Health and Human Services, management revised the option iii lost revenues calculation for Period 4 to better allocate significant one-time adjustments to patient service revenue among the quarterly reporting periods. The narrative describing management's methodology was not adequately updated to reflect the exclusion of incentive revenue for all periods within the calculation. Identification as a repeat finding, if applicable – Yes, see Finding 2022-003. Recommendation –The Organization should strengthen controls surrounding the preparation of financial reports required to be prepared and submitted for federal grants to ensure they are prepared using complete and accurate financial information. Views of responsible officials and planned corrective actions – Management agrees with this finding, as our narrative did not specifically list out and specify the backing out of incentive revenue completely from our Option iii calculation. However, when the narrative discusses “backing these items out”, our intent was for incentive revenue to be included in that grouping, but that was never implied in the narrative implicitly. Our incentive revenues can be greatly delayed in receiving and knowing about, therefore it would have inflated lost revenues to leave 2019 incentive revenue if we had none for the following years we were comparing to. Therefore we feel it was justified to take the incentive revenue out of the calculation completely to keep it the same for all years being compared. For that reason, because the narrative did not match our actual calculation is the reason for this finding.

Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution – Assistance Listing No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) and Reporting (45 CFR 75.342) Condition – Within the Provider Relief Fund Reporting Portal for Period 4, the Organization reported other Provider Relief Fund (PRF) expenses and lost revenues calculated using option iii. The option iii narrative stated that management "evened out any one-time journal entries made in one quarter that should have been spread evenly throughout a year." Additionally, the narrative stated "After backing these items out, we felt like we had an apples-to-apples comparison to get a true picture of our lost revenue." However, instead of spreading incentive revenue out over the period to which it related, it was excluded from all reporting periods within the lost revenues calculation. Questioned Costs – Unknown Context – The Period 4 PRF report was tested. Management excluded all incentive revenue from patient service revenue but did not state that it was doing so in the narrative supporting its option iii lost revenues calculation. Effect – Lost revenues attributable to coronavirus, as reported in the Period 1 PRF report, were overstated. Cause – As permitted by U.S. Department of Health and Human Services, management revised the option iii lost revenues calculation for Period 4 to better allocate significant one-time adjustments to patient service revenue among the quarterly reporting periods. The narrative describing management's methodology was not adequately updated to reflect the exclusion of incentive revenue for all periods within the calculation. Identification as a repeat finding, if applicable – Yes, see Finding 2022-003. Recommendation –The Organization should strengthen controls surrounding the preparation of financial reports required to be prepared and submitted for federal grants to ensure they are prepared using complete and accurate financial information. Views of responsible officials and planned corrective actions – Management agrees with this finding, as our narrative did not specifically list out and specify the backing out of incentive revenue completely from our Option iii calculation. However, when the narrative discusses “backing these items out”, our intent was for incentive revenue to be included in that grouping, but that was never implied in the narrative implicitly. Our incentive revenues can be greatly delayed in receiving and knowing about, therefore it would have inflated lost revenues to leave 2019 incentive revenue if we had none for the following years we were comparing to. Therefore we feel it was justified to take the incentive revenue out of the calculation completely to keep it the same for all years being compared. For that reason, because the narrative did not match our actual calculation is the reason for this finding.