Audit 16809

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. The Hospital is required to prepare and submit a report of expenditures of PRF to the U.S. Department of Health and Human Services (HHS). The 2022 Compliance Supplement states that this report is to be prepared using accurate financial information and submitted by the deadline established. The funds may not be used to reimburse expenses or losses that have been reimbursed or obligated to be reimbursed by other sources. Condition: The Hospital reported COVID-19 related expenditures within the HHS PRF portal that were reimbursed by patient service revenue. These expenses were improperly included within the reporting portal, which caused the report to be inaccurate. Cause of Condition: The guidance provided by HHS to providers regarding reporting of COVID-19 related expenses and lost revenues is, at times, difficult to comprehend and apply and has changed over time. Internal controls were not in place to ensure the Hospital correctly applied the most revised guidance. Effect: The reporting submitted to HHS for Period 2 PRF is considered incorrect, as expenses were not reduced by reimbursement received through patient service revenue. Context: The Hospital has lost revenues from 2020 that have not yet been reported on the HHS PRF portal as COVID-19 expenditures. The amount of lost revenue exceeds the amounts of PRF received in the current and previous periods. The Hospital has appropriately expended PRF on COVID-19 related expenses, including lost revenue, but the reporting to HHS for Period 2 is considered inaccurate. Auditor?s Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared accurately under applicable guidelines. In addition, management should adjust subsequent period PRF reports to include lost revenues that had not previously been reported and update as needed for prior expenses reported. Views of Responsible Officials: See attached Management?s Corrective Action Plan for the Hospital?s response to finding.

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. The Hospital is required to prepare and submit a report of expenditures of PRF to the U.S. Department of Health and Human Services (HHS). The 2022 Compliance Supplement states that this report is to be prepared using accurate financial information and submitted by the deadline established. The funds may not be used to reimburse expenses or losses that have been reimbursed or obligated to be reimbursed by other sources. Condition: The Hospital reported COVID-19 related expenditures within the HHS PRF portal that were reimbursed by patient service revenue. These expenses were improperly included within the reporting portal, which caused the report to be inaccurate. Cause of Condition: The guidance provided by HHS to providers regarding reporting of COVID-19 related expenses and lost revenues is, at times, difficult to comprehend and apply and has changed over time. Internal controls were not in place to ensure the Hospital correctly applied the most revised guidance. Effect: The reporting submitted to HHS for Period 2 PRF is considered incorrect, as expenses were not reduced by reimbursement received through patient service revenue. Context: The Hospital has lost revenues from 2020 that have not yet been reported on the HHS PRF portal as COVID-19 expenditures. The amount of lost revenue exceeds the amounts of PRF received in the current and previous periods. The Hospital has appropriately expended PRF on COVID-19 related expenses, including lost revenue, but the reporting to HHS for Period 2 is considered inaccurate. Auditor?s Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared accurately under applicable guidelines. In addition, management should adjust subsequent period PRF reports to include lost revenues that had not previously been reported and update as needed for prior expenses reported. Views of Responsible Officials: See attached Management?s Corrective Action Plan for the Hospital?s response to finding.