Audit 26287

Finding: Reporting and Activities Allowed or Unallowed, Allowable Costs/Cost Principles CFDA No. 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and 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). The Provider Relief Fund (PRF) was established in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) to reimburse, through grants or other mechanisms, eligible health care providers for increased expenses or lost revenue attributable to Coronavirus Disease 2019 (COVID-19). Entities that receive more than $10,000 (either one time or in the aggregate) are required to report the uses of their funds, including the lost revenue reimbursement and documentation of how the lost revenue was calculated. In addition, the Organization is required to implement and maintain internal controls over financial reporting.. Condition: During our review of the Period 3 report for West Springs Hospital, we noted the Organization included direct expenses from 2020 and 2021 that had already been included on reporting Period 1. In addition, there was an audit entry recorded for fiscal year 2021 that had not been updated with the Period 3 report calculations. Questioned Costs: $306,246 consisting of $170,246 of direct expenses duplicated on reporting Period 3, $110,000 due to an audit entry change not included, and approximately $26,000 due to an input error. Context: Direct expenses from 2020 and 2021 should not have been included and overstated the direct expenses applied to PRF funding by $170,246. The audit entry not included in the Period 3 revenues, reduced revenue by $110,000 along with a keying difference between general ledger data and the report of approximately $26,000. Effect: The federal government relies on the information reported in the Health Resources and Services Administration (HRSA) to be accurate for monitoring purposes. The Organization reported a total lost revenue value of approximately $6,710,000 and received approximately $1,269,000. While the information keyed into the reporting Period 3 PRF expenses and actual revenues was incorrect, the Organization demonstrated an overall lost revenue value in excess of payments received. Causes: The Organization did not have adequate internal controls in place to identify costs were duplicated and that revenue adjustments made during the audit had not been updated in the lost revenue calculations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: The Organization added internal controls over reporting for federal funds to help ensure compliance and changes in guidance are followed. Views of Responsible Officials: The Organization agrees with the finding. See separate auditee document for planned corrective action.

Finding: Reporting and Activities Allowed or Unallowed, Allowable Costs/Cost Principles CFDA No. 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and 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). The Provider Relief Fund (PRF) was established in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) to reimburse, through grants or other mechanisms, eligible health care providers for increased expenses or lost revenue attributable to Coronavirus Disease 2019 (COVID-19). Entities that receive more than $10,000 (either one time or in the aggregate) are required to report the uses of their funds, including the lost revenue reimbursement and documentation of how the lost revenue was calculated. In addition, the Organization is required to implement and maintain internal controls over financial reporting.. Condition: During our review of the Period 3 report for West Springs Hospital, we noted the Organization included direct expenses from 2020 and 2021 that had already been included on reporting Period 1. In addition, there was an audit entry recorded for fiscal year 2021 that had not been updated with the Period 3 report calculations. Questioned Costs: $306,246 consisting of $170,246 of direct expenses duplicated on reporting Period 3, $110,000 due to an audit entry change not included, and approximately $26,000 due to an input error. Context: Direct expenses from 2020 and 2021 should not have been included and overstated the direct expenses applied to PRF funding by $170,246. The audit entry not included in the Period 3 revenues, reduced revenue by $110,000 along with a keying difference between general ledger data and the report of approximately $26,000. Effect: The federal government relies on the information reported in the Health Resources and Services Administration (HRSA) to be accurate for monitoring purposes. The Organization reported a total lost revenue value of approximately $6,710,000 and received approximately $1,269,000. While the information keyed into the reporting Period 3 PRF expenses and actual revenues was incorrect, the Organization demonstrated an overall lost revenue value in excess of payments received. Causes: The Organization did not have adequate internal controls in place to identify costs were duplicated and that revenue adjustments made during the audit had not been updated in the lost revenue calculations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: The Organization added internal controls over reporting for federal funds to help ensure compliance and changes in guidance are followed. Views of Responsible Officials: The Organization agrees with the finding. See separate auditee document for planned corrective action.