Audit 23714

2022-004Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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. Condition: The Health System selected option ii to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Health System did not have a budget for the entire reporting period that was approved prior to March 27, 2020. The Health System used the corresponding months from their fiscal year budget for the periods that did not have an approved budget. In addition, the internal statements net patient revenue differed from the net patient revenue in the audited financial statement due to certain cost centers being classified differently. Finally, the Health System?s report submitted to the Department of Health and Human Services (HHS) for Period 1 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Health System did not have an internal control process in place to ensure review and approval of the Period 1 HHS report was documented. The Health System did have an approved budget prior to March 27, 2020 for fiscal year 2020, but the approved budget did not cover the entire period of availability. The difference in net patient revenue in the audited financial statements were not reconciled with the net patient revenue on the internal statements. Effect: The reporting to HHS for Period 1 was considered incorrect. The Health System did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Lost revenue differences using internal financial statements rather than net patient revenue reported on the audited financial statements differed less than $25,000. Had the Health System elected to use option iii to calculate lost revenue utilizing an alternative reasonable method, lost revenues may have been allowed. Context: Key line items were tested on the Period 1 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. In addition, we recommend that the Health System enhance internal control policies to ensure all lost revenue calculations are reviewed and approved to ensure that they are electing the appropriate methodology and in accordance with program requirements. Views of Responsible Individuals: Management agrees with the finding.

2022-005Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance 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. Condition: The Health System?s Period 1 expenditures and report to HHS included an expense that was reduced for a reimbursement rate in duplicate. Cause: Due to a clerical oversight, the Health System calculated the reimbursement rate from the total expenses, but also calculated the reimbursement on an individual expense in duplicate. Effect: There is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None reported as the amount claimed was understated. Eligible expenses on the period 1 report were understated by an amount less than $25,000. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample of 60 contained an error. All expenditures? reduction for reimbursement was recomputed from the population to arrive at the known error. Key line items on the Period 1 report were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the reduction for reimbursement of expenditures are calculated and reported correctly. Views of Responsible Individuals: Management agrees with the finding.

2022-006Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance 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. Condition: The Health System claimed expenses that were incurred prior to when the Health System began to prepare for, prevent and respond to the coronavirus. This resulted in the incorrect treatment of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1. Cause: The terms and conditions were not properly assessed to ensure claimed expenses were allowable under the federal program and claimed on the special report submitted to HHS for Period 1. Effect: There were $144,685 of expenses claimed and reported in the special report submitted to HHS for Period 1 relating to January 2020, which is prior to when the Health System began to prepare for, prevent and respond to the coronavirus. Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as there was additional lost revenue claimed in excess of $600,000 on the special report submitted to HHS for Period 1 TIN #476028103 that was tested to cover the amount of unallowed expenses. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample contained a January 2020 expenditure. All January 2020 expenditures were identified from the population to arrive at the known error. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions of the award and are properly included in the reports required to be submitted to the federal agency. We recommend management update any future special reports submitted to HHS as deemed appropriate. Views of Responsible Individuals: Management agrees with the finding.

2022-004Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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. Condition: The Health System selected option ii to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Health System did not have a budget for the entire reporting period that was approved prior to March 27, 2020. The Health System used the corresponding months from their fiscal year budget for the periods that did not have an approved budget. In addition, the internal statements net patient revenue differed from the net patient revenue in the audited financial statement due to certain cost centers being classified differently. Finally, the Health System?s report submitted to the Department of Health and Human Services (HHS) for Period 1 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Health System did not have an internal control process in place to ensure review and approval of the Period 1 HHS report was documented. The Health System did have an approved budget prior to March 27, 2020 for fiscal year 2020, but the approved budget did not cover the entire period of availability. The difference in net patient revenue in the audited financial statements were not reconciled with the net patient revenue on the internal statements. Effect: The reporting to HHS for Period 1 was considered incorrect. The Health System did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Lost revenue differences using internal financial statements rather than net patient revenue reported on the audited financial statements differed less than $25,000. Had the Health System elected to use option iii to calculate lost revenue utilizing an alternative reasonable method, lost revenues may have been allowed. Context: Key line items were tested on the Period 1 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. In addition, we recommend that the Health System enhance internal control policies to ensure all lost revenue calculations are reviewed and approved to ensure that they are electing the appropriate methodology and in accordance with program requirements. Views of Responsible Individuals: Management agrees with the finding.

2022-005Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance 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. Condition: The Health System?s Period 1 expenditures and report to HHS included an expense that was reduced for a reimbursement rate in duplicate. Cause: Due to a clerical oversight, the Health System calculated the reimbursement rate from the total expenses, but also calculated the reimbursement on an individual expense in duplicate. Effect: There is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None reported as the amount claimed was understated. Eligible expenses on the period 1 report were understated by an amount less than $25,000. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample of 60 contained an error. All expenditures? reduction for reimbursement was recomputed from the population to arrive at the known error. Key line items on the Period 1 report were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the reduction for reimbursement of expenditures are calculated and reported correctly. Views of Responsible Individuals: Management agrees with the finding.

2022-006Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance 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. Condition: The Health System claimed expenses that were incurred prior to when the Health System began to prepare for, prevent and respond to the coronavirus. This resulted in the incorrect treatment of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1. Cause: The terms and conditions were not properly assessed to ensure claimed expenses were allowable under the federal program and claimed on the special report submitted to HHS for Period 1. Effect: There were $144,685 of expenses claimed and reported in the special report submitted to HHS for Period 1 relating to January 2020, which is prior to when the Health System began to prepare for, prevent and respond to the coronavirus. Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as there was additional lost revenue claimed in excess of $600,000 on the special report submitted to HHS for Period 1 TIN #476028103 that was tested to cover the amount of unallowed expenses. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample contained a January 2020 expenditure. All January 2020 expenditures were identified from the population to arrive at the known error. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions of the award and are properly included in the reports required to be submitted to the federal agency. We recommend management update any future special reports submitted to HHS as deemed appropriate. Views of Responsible Individuals: Management agrees with the finding.