Audit 25172

FY End
2022-09-30
Total Expended
$10.18M
Findings
2
Programs
1
Year: 2022 Accepted: 2023-08-03

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
35569 2022-001 - - L
612011 2022-001 - - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $10.18M Yes 1

Contacts

Name Title Type
J318Z9YKG8J3 Sergio Melgar Auditee
5083340252 Christopher Cox Auditor
No contacts on file

Notes to SEFA

Title: Description of Organization Accounting Policies: The information in the accompanying Schedule of Expenditures of Federal Awards for the Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan Rural Distribution Program (the "Schedule") is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Since the Schedule presents only a selected portion of activities of UMass Memorial Health - Harrington, Inc. (Harrington), it is not intended to and does not, present the balance sheet, results of operations, changes in net assets or cash flows of Harrington. De Minimis Rate Used: N Rate Explanation: Harrington does not charge indirect costs to the HHS Provider Relief Fund and American Rescue Plan Rural Distribution Program in the Schedule and thus the 10% de minimis indirect cost rate, as described in Section 200.414 of the Uniform Guidance, is not applicable. Harrington, and its related affiliates, including UMass Memorial Health - Harrington Hospital, Inc. and Harrington Physician Services, Inc., became wholly controlled subsidiaries of UMass Memorial Community Hospitals, Inc. effective July 1, 2021. Harrington and its affiliates operate under the brand of UMass Memorial Health. Harrington is a not-for-profit organization providing inpatient, outpatient and extended care services to residents in its service area.
Title: 3.Department of Health and Human Services Provider Relief Funds Accounting Policies: The information in the accompanying Schedule of Expenditures of Federal Awards for the Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan Rural Distribution Program (the "Schedule") is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Since the Schedule presents only a selected portion of activities of UMass Memorial Health - Harrington, Inc. (Harrington), it is not intended to and does not, present the balance sheet, results of operations, changes in net assets or cash flows of Harrington. De Minimis Rate Used: N Rate Explanation: Harrington does not charge indirect costs to the HHS Provider Relief Fund and American Rescue Plan Rural Distribution Program in the Schedule and thus the 10% de minimis indirect cost rate, as described in Section 200.414 of the Uniform Guidance, is not applicable. The Schedule includes grant activity related to Harrington's HHS Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution Program Assistance Listing Number 93.498 received between July 1, 2020 - June 30, 2021, prior to UMass Memorial Community Hospitals, Inc.'s acquisition of Harrington. As required based on guidance in the 2022 OMB Compliance Supplement, the Schedule includes lost revenues and direct expenditures reported for Period 2 on March 31, 2022, and Period 3 on September 30, 2022 as reported to HHS via the PRF Reporting Portal. The Schedule thus includes $8,299,443 of direct expenditures and $1,884,885 in lost revenue.
Title: 5.Subsequent Event Accounting Policies: The information in the accompanying Schedule of Expenditures of Federal Awards for the Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan Rural Distribution Program (the "Schedule") is presented in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Since the Schedule presents only a selected portion of activities of UMass Memorial Health - Harrington, Inc. (Harrington), it is not intended to and does not, present the balance sheet, results of operations, changes in net assets or cash flows of Harrington. De Minimis Rate Used: N Rate Explanation: Harrington does not charge indirect costs to the HHS Provider Relief Fund and American Rescue Plan Rural Distribution Program in the Schedule and thus the 10% de minimis indirect cost rate, as described in Section 200.414 of the Uniform Guidance, is not applicable. The Schedule and related disclosures include evaluation of events through August 4, 2023, the date the Schedule was issued. There were no such events that require adjustments or disclosure.

Finding Details

2022-001 Provider Relief Fund (?PRF?) Lost Revenue Reporting Cluster: Not applicable Grantor: Health Resources and Services Administration Award Name: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: PRF Period 3 Award Number: Not applicable Assistance Listing Number: 93.498 Criteria Step 6 of the Steps on Reporting on Use of Funds section of the June 11, 2021 Provider Relief Fund (PRF) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues, calculated as the difference between actual patient care revenues, to submit revenues from patient care in the PRF Reporting Portal by quarter from January 1, 2019 to June 30, 2022, the end of the Period 3 period of availability. Condition Harrington understated patient care revenues reported in the PRF Reporting Portal for the third and fourth quarters of calendar year 2021 by approximately $6.2 million. Specifically, Harrington Hospital, Inc. (HMH) and Harrington Physician Services (HPS) reported incorrect values for patient care revenues in these quarters resulting in an understatement of patient care revenues in the PRF Reporting Portal by approximately $5.7 million and $0.5 million, respectively. Cause Harrington did not have an effective control in place to ensure a sufficient review was performed over the accuracy of revenues from patient care used as inputs to the lost revenue calculation prior to completing the PRF Period 3 Reporting Portal submissions. Effect While revenues from patient care were inaccurately reported in the PRF Period 3 Reporting Portal Submission, Harrington had sufficient lost revenues and unreimbursed COVID-19-related expenses to support the amount of Period 3 PRF funding received. Questioned Costs None identified. Recommendation We recommend that management ensure there is an effective control in place whereby a detailed review is performed and evidenced of the lost revenue calculation detail prior to PRF Reporting Portal submissions. Management?s Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.
2022-001 Provider Relief Fund (?PRF?) Lost Revenue Reporting Cluster: Not applicable Grantor: Health Resources and Services Administration Award Name: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: PRF Period 3 Award Number: Not applicable Assistance Listing Number: 93.498 Criteria Step 6 of the Steps on Reporting on Use of Funds section of the June 11, 2021 Provider Relief Fund (PRF) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues, calculated as the difference between actual patient care revenues, to submit revenues from patient care in the PRF Reporting Portal by quarter from January 1, 2019 to June 30, 2022, the end of the Period 3 period of availability. Condition Harrington understated patient care revenues reported in the PRF Reporting Portal for the third and fourth quarters of calendar year 2021 by approximately $6.2 million. Specifically, Harrington Hospital, Inc. (HMH) and Harrington Physician Services (HPS) reported incorrect values for patient care revenues in these quarters resulting in an understatement of patient care revenues in the PRF Reporting Portal by approximately $5.7 million and $0.5 million, respectively. Cause Harrington did not have an effective control in place to ensure a sufficient review was performed over the accuracy of revenues from patient care used as inputs to the lost revenue calculation prior to completing the PRF Period 3 Reporting Portal submissions. Effect While revenues from patient care were inaccurately reported in the PRF Period 3 Reporting Portal Submission, Harrington had sufficient lost revenues and unreimbursed COVID-19-related expenses to support the amount of Period 3 PRF funding received. Questioned Costs None identified. Recommendation We recommend that management ensure there is an effective control in place whereby a detailed review is performed and evidenced of the lost revenue calculation detail prior to PRF Reporting Portal submissions. Management?s Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.