Audit 19517

Finding 2022 01 Program Information: Compliance Requirement: Allowability and Reporting Federal Agency: Health Resources and Services Administration (HRSA) Federal Program Title: Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution (Assistance Listing No. 93.498) Award Year: January 1, 2021 through December 31, 2021 Criteria: The terms and conditions of the Provider Relief Fund (PRF) distributions state that funds are provided for health care-related expenses or lost revenues attributable to coronavirus. The funds are not to be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. In addition, CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Conditions Found: The Health System filed reports for both Nebraska Methodist Health System (NMHS) and Methodist Fremont Hospital (MFH), related to periods 3 and 4 reporting. During the process of agreeing revenue reported for both periods, we identified that MFH revenue was underreported and NMHS was overreported for Q2 2020 in the amount of $1,175,244. This error resulted in MFH recognizing additional lost revenue and therefore having sufficient lost revenue to cover period 4 PRF payments received. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Identification of Questioned Costs: Total known questioned costs for ALN 93.498 amounted to $1,175,244 and were calculated based off total lost revenue reported during the Period 4 report submission. Repeat Finding: This finding is not a repeat finding in the immediately prior audit. Cause: The Health System did not perform procedures to review that the lost revenues recorded agreed to the underlying accounting records as part of the calculation of lost revenues incurred. Effect: MFH applied $1,175,244 of funds received against lost revenues which MFH did not incur. Recommendation: We recommend the Health System enhance its internal control to ensure that the Health System?s controls operating at an appropriate precision level and to perform a review over the allowability of costs. View of Responsible Officials: We concur with the finding and will correct the period 5 report to properly reflect lost revenues and include expenditures that are allowable under the compliance requirements. We will also improve our reporting review process to ensure such reporting errors are identified and corrected before submission.

Finding 2022 01 Program Information: Compliance Requirement: Allowability and Reporting Federal Agency: Health Resources and Services Administration (HRSA) Federal Program Title: Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution (Assistance Listing No. 93.498) Award Year: January 1, 2021 through December 31, 2021 Criteria: The terms and conditions of the Provider Relief Fund (PRF) distributions state that funds are provided for health care-related expenses or lost revenues attributable to coronavirus. The funds are not to be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. In addition, CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Conditions Found: The Health System filed reports for both Nebraska Methodist Health System (NMHS) and Methodist Fremont Hospital (MFH), related to periods 3 and 4 reporting. During the process of agreeing revenue reported for both periods, we identified that MFH revenue was underreported and NMHS was overreported for Q2 2020 in the amount of $1,175,244. This error resulted in MFH recognizing additional lost revenue and therefore having sufficient lost revenue to cover period 4 PRF payments received. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Identification of Questioned Costs: Total known questioned costs for ALN 93.498 amounted to $1,175,244 and were calculated based off total lost revenue reported during the Period 4 report submission. Repeat Finding: This finding is not a repeat finding in the immediately prior audit. Cause: The Health System did not perform procedures to review that the lost revenues recorded agreed to the underlying accounting records as part of the calculation of lost revenues incurred. Effect: MFH applied $1,175,244 of funds received against lost revenues which MFH did not incur. Recommendation: We recommend the Health System enhance its internal control to ensure that the Health System?s controls operating at an appropriate precision level and to perform a review over the allowability of costs. View of Responsible Officials: We concur with the finding and will correct the period 5 report to properly reflect lost revenues and include expenditures that are allowable under the compliance requirements. We will also improve our reporting review process to ensure such reporting errors are identified and corrected before submission.