FAC Explorer

Audit 23696

FY End
2022-06-30
Total Expended
$8.54M
Findings
4
Programs
6
Organization: Butler Health System and Subsidiaries (PA)
Year: 2022 Accepted: 2023-03-29
Auditor: Forvis LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
20674 2022-003 Material Weakness - AB
20675 2022-004 Significant Deficiency - L
597116 2022-003 Material Weakness - AB
597117 2022-004 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $5.94M Yes 2
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.27M Yes 0
10.766 Community Facilities Loans and Grants $1.00M Yes 0
93.697 Covid-19 Testing for Rural Health Clinics $149,461 - 0
93.461 Covid-19 Testing for the Uninsured $133,298 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $49,529 - 0

Contacts

Name Title Type
ZW74JL369923 Eric Huss Auditee
7242836666 Ryan O'Grady 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 or other applicable regulatory guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Butler Health System and Subsidiaries has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Butler Health System and Subsidiaries under programs of the federal government for the year ended June 30, 2022. The information in this 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 Butler Health System and Subsidiaries, it is not intended to and does not present the consolidated financial position, results of operations, changes in net assets, or cash flows of Butler Health System and Subsidiaries.
Title: Note 4: Federal Loan Programs 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 or other applicable regulatory guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Butler Health System and Subsidiaries has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Butler Health System and Subsidiaries did not have any federal loan programs during the year ended June 30, 2022.
Title: Note 5: Personal Protective Equipment (PPE) (Unaudited) 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 or other applicable regulatory guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: Butler Health System and Subsidiaries has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Butler Health System and Subsidiaries did not receive any federally donated Personal Protective Equipment (PPE) during the year ended June 30, 2022.

Finding Details

Finding 2022-003
COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA 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) Condition ? Butler Ambulatory Surgery Center, LLC (the ?Surgery Center?) is a joint venture that operates an ambulatory surgery center. The System maintains a 51 percent ownership share in the Surgery Center. The Surgery Center was required to file a Period 2 Provider Relief Fund (PRF) report during the year; however, did not maintain adequate documentation to support the other PRF expenses were attributable to coronavirus and/or had not been or were not eligible to be reimbursed by other sources. Questioned Costs ? $681,390 Context ? The Surgery Center utilized PRF payments received on salaries and employee benefits without identifying portions of employee?s time directly attributed to coronavirus. The Surgery Center also utilized PRF payments received on annual insurance premiums, without identifying the portion of the increased premiums attributable to coronavirus. In addition, the Surgery Center utilized PRF payments received on their entire monthly building rent costs for the clinic, without identifying the portion of expense attributable to coronavirus. The Surgery Center was unable to provide adequate documentation to support the other PRF expenses had not been or were not eligible to be reimbursed by other sources. Effect ? The Surgery Center utilized PRF payments received on expenses that were not documented as attributable to coronavirus, were potentially reimbursed by other sources, and/or were not allowable in accordance with other guidance issued by HHS. Cause ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution is a new program with complex and evolving regulations and compliance requirements. Internal controls were not in place to ensure the Surgery Center correctly applied the guidance. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over allowable activities and federal grant reporting should be modified to ensure expenditures charged to grants are for activities allowed and federal grant reports are prepared using complete and accurate information.
Finding 2022-004
COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement ? Reporting (45 CFR 75.342) Condition ? The System is required to prepare and submit period 2 and period 3 provider relief fund reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs ? None Context ? Errors were made in the System?s Option iii Lost Revenues reported in periods 2 and 3. Specifically, certain Lost Revenues experienced during the period of availability were not reported; however, when these errors are considered, the System?s available Lost Revenue increased from what was originally reported in periods 2 and 3. Effect ? Errors were identified in the System?s Option iii quarterly Lost Revenue totals reported to HHS; however, when these errors are considered, the System?s total Provider Relief Fund payments applied to lost revenues did not change from what was originally reported in periods 2 or 3. Cause ? The System?s internal controls did not properly identify certain reporting requirements for the Provider Relief Fund and American Rescue (ARP) Rural Distributions. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.
Finding 2022-003
COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA 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) Condition ? Butler Ambulatory Surgery Center, LLC (the ?Surgery Center?) is a joint venture that operates an ambulatory surgery center. The System maintains a 51 percent ownership share in the Surgery Center. The Surgery Center was required to file a Period 2 Provider Relief Fund (PRF) report during the year; however, did not maintain adequate documentation to support the other PRF expenses were attributable to coronavirus and/or had not been or were not eligible to be reimbursed by other sources. Questioned Costs ? $681,390 Context ? The Surgery Center utilized PRF payments received on salaries and employee benefits without identifying portions of employee?s time directly attributed to coronavirus. The Surgery Center also utilized PRF payments received on annual insurance premiums, without identifying the portion of the increased premiums attributable to coronavirus. In addition, the Surgery Center utilized PRF payments received on their entire monthly building rent costs for the clinic, without identifying the portion of expense attributable to coronavirus. The Surgery Center was unable to provide adequate documentation to support the other PRF expenses had not been or were not eligible to be reimbursed by other sources. Effect ? The Surgery Center utilized PRF payments received on expenses that were not documented as attributable to coronavirus, were potentially reimbursed by other sources, and/or were not allowable in accordance with other guidance issued by HHS. Cause ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution is a new program with complex and evolving regulations and compliance requirements. Internal controls were not in place to ensure the Surgery Center correctly applied the guidance. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over allowable activities and federal grant reporting should be modified to ensure expenditures charged to grants are for activities allowed and federal grant reports are prepared using complete and accurate information.
Finding 2022-004
COVID-19 Provider Relief Fund and American Rescue (ARP) Rural Distribution CFDA No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement ? Reporting (45 CFR 75.342) Condition ? The System is required to prepare and submit period 2 and period 3 provider relief fund reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs ? None Context ? Errors were made in the System?s Option iii Lost Revenues reported in periods 2 and 3. Specifically, certain Lost Revenues experienced during the period of availability were not reported; however, when these errors are considered, the System?s available Lost Revenue increased from what was originally reported in periods 2 and 3. Effect ? Errors were identified in the System?s Option iii quarterly Lost Revenue totals reported to HHS; however, when these errors are considered, the System?s total Provider Relief Fund payments applied to lost revenues did not change from what was originally reported in periods 2 or 3. Cause ? The System?s internal controls did not properly identify certain reporting requirements for the Provider Relief Fund and American Rescue (ARP) Rural Distributions. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.