Audit 251646

Assitance Listing Number, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services, COVID 19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Federal Award Identification Number and Year N/A, 2022 Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding Yes 2021 002 Criteria Per the Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements dated June 11, 2021, recipients may choose to apply PRF payments toward lost revenue using one of three options, up to the following amounts: Option i: The difference between actual patient care revenue Option ii: The difference between budgeted (prior to March 27, 2020) and actual patient care revenue Option iii: The amount calculated by any reasonable method of estimating revenue. Condition The Hospital?s controls in place for reporting submissions did not identify that the lost revenue amounts reported in the period 3 portal submission did not consistently follow the Hospital's Option iii methodology. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Refer to context below for additional information. Context The reporting submission for lost revenue did not follow the acceptable options provided by the U.S. Department of Health and Human Services, because the amounts reported by the Hospital were not consistent with its Option iii methodology. Recipients may choose to apply Provider Relief Fund payments toward lost revenue using one of three options: (i) up to the amount of the difference between actual patient care revenue, (ii) up to the amount of the difference between budgeted (if approved prior to March 27, 2020) and actual patient care revenue, or (iii) up to the amount calculated by any reasonable method of estimating revenue. The Hospital used Option iii to calculate lost revenue, but inconsistently applied its methodology and, as a result, reported an incorrect total of lost revenue in 3 of the quarters included in the period 3 submission, resulting in overstated lost revenue of $330,557. If the Hospital had reported amounts that were consistent with its Option iii methodology, it still would have qualified to recognize all PRF payments received during the period. Cause and Effect Appropriate review of the reporting submission was not completed to ensure the report followed the required guidelines and the Hospital's methodologies. As a result, the report submitted was inaccurate. Recommendation We recommend the Hospital implement controls, including levels of review, to ensure reports are completed and submitted in accordance with the guidelines established by HHS. Views of Responsible Officials and Corrective Action Plan Let it be known that if the overstated lost revenue amount from the period 3 submission were to be disallowed by the U.S. Department of Health and Human Services, the unused lost revenue after the overstatement is corrected more than offsets the disallowed amount. The issue was corrected in the period 4 submission.

Assitance Listing Number, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services, COVID 19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Federal Award Identification Number and Year N/A, 2022 Pass through Entity N/A Direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding Yes 2021 002 Criteria Per the Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements dated June 11, 2021, recipients may choose to apply PRF payments toward lost revenue using one of three options, up to the following amounts: Option i: The difference between actual patient care revenue Option ii: The difference between budgeted (prior to March 27, 2020) and actual patient care revenue Option iii: The amount calculated by any reasonable method of estimating revenue. Condition The Hospital?s controls in place for reporting submissions did not identify that the lost revenue amounts reported in the period 3 portal submission did not consistently follow the Hospital's Option iii methodology. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Refer to context below for additional information. Context The reporting submission for lost revenue did not follow the acceptable options provided by the U.S. Department of Health and Human Services, because the amounts reported by the Hospital were not consistent with its Option iii methodology. Recipients may choose to apply Provider Relief Fund payments toward lost revenue using one of three options: (i) up to the amount of the difference between actual patient care revenue, (ii) up to the amount of the difference between budgeted (if approved prior to March 27, 2020) and actual patient care revenue, or (iii) up to the amount calculated by any reasonable method of estimating revenue. The Hospital used Option iii to calculate lost revenue, but inconsistently applied its methodology and, as a result, reported an incorrect total of lost revenue in 3 of the quarters included in the period 3 submission, resulting in overstated lost revenue of $330,557. If the Hospital had reported amounts that were consistent with its Option iii methodology, it still would have qualified to recognize all PRF payments received during the period. Cause and Effect Appropriate review of the reporting submission was not completed to ensure the report followed the required guidelines and the Hospital's methodologies. As a result, the report submitted was inaccurate. Recommendation We recommend the Hospital implement controls, including levels of review, to ensure reports are completed and submitted in accordance with the guidelines established by HHS. Views of Responsible Officials and Corrective Action Plan Let it be known that if the overstated lost revenue amount from the period 3 submission were to be disallowed by the U.S. Department of Health and Human Services, the unused lost revenue after the overstatement is corrected more than offsets the disallowed amount. The issue was corrected in the period 4 submission.