FAC Explorer

Audit 26341

FY End
2022-06-30
Total Expended
$29.41M
Findings
2
Programs
4
Organization: Community Memorial Hospital District D/b/a Syracuse Area Health (NE)
Year: 2022 Accepted: 2023-01-25
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
22327 2022-001 Material Weakness - ABL
598769 2022-001 Material Weakness - ABL

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $28.26M Yes 0
93.498 Provider Relief Fund $852,125 Yes 1
93.697 Covid-19 Testing for Rural Health Clinics $200,000 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $99,058 - 0

Contacts

Name Title Type
Z5A7LKQM57P5 Michael Harvey Auditee
4022697620 Randy Hoffman Auditor
No contacts on file

Notes to SEFA

Title: Note 4: Provider Relief Funds Accounting Policies: Note 1: Basis of Presentation - The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of SAH 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 SAH, it is not intended to and does not present the financial position, changes in net assets or cash flows of SAH. Note 2: Summary of Significant 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: SAH has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. SAH received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) program (Federal Assistance Listing Number #93.498) during the year ended June 30, 2022. SAH incurred eligible expenditures (including lost revenue) and, therefore, recognized revenue totaling $372,048 for the year ended June 30, 2022 in the financial statements. In accordance with the compliance supplement addendum, the PRF expenditures recognized on the schedule are based on reports submitted to HHS for funding with periods of availability ending from July 1, 2021 to June 30, 2022, as required under the PRF program. The amount of PRF expenditures included on the schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amounts than have been reimbursed or are obligated to be reimbursed by other sources. Actual results could differ from those estimates.
Title: Note 5: Loans Accounting Policies: Note 1: Basis of Presentation - The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of SAH 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 SAH, it is not intended to and does not present the financial position, changes in net assets or cash flows of SAH. Note 2: Summary of Significant 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 Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: SAH has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The balance of the loan outstanding at June 30, 2022 consists of: Federal Assistance Listing Number - 10.766 Program/Cluster Name -Community Facilities Loans and Grants Cluster Outstanding Balance - $27,194,207

Finding Details

Finding 2022-001
Finding No. 2022-001 Federal Program: Federal Assistance Listing #93.498 US Department of Health and Human Services Provider Relief Fund Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance. Activities Allowed/Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control 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: SAH selected option I to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the base calendar year of 2019. For all periods reported in SAH?s Period 2 submission, the reported patient service revenue amounts did not agree to the underlying internal financial statements. Furthermore, SAH did not report actual revenue for Quarter 3 2021 and Quarter 4 2021. Cause: SAH did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the report submitted for Period 2 was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 2 was considered incorrect. Amounts reported for quarter 1 through quarter 4 for 2019 and 2020 and quarters 1 and 2 for 2021 did not agree to the underlying internal financial statements. SAH also did not report actual revenue for quarter 3 2021 and quarter 4 2021. Had the proper amounts been reported, the impact would have been to decrease the reported lost revenue by $10,601,620. Questioned Costs: None. Had SAH properly reported patient service revenue for all required quarters, the total calculated lost revenue would have been $1,319,041 versus the $11,920,661 reported, which exceeded the total funds received in period 2. Context: Key line items were tested on the Period 2 HHS report. Recommendation: We recommend SAH enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials and Planned Corrective Action: Management agrees with the noted finding. However, had SAH reported the correct lost revenue figures, SAH satisfactorily incurred eligible expenses and lost revenue in excess of funding expended. Management will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.
Finding 2022-001
Finding No. 2022-001 Federal Program: Federal Assistance Listing #93.498 US Department of Health and Human Services Provider Relief Fund Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance. Activities Allowed/Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control 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: SAH selected option I to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the base calendar year of 2019. For all periods reported in SAH?s Period 2 submission, the reported patient service revenue amounts did not agree to the underlying internal financial statements. Furthermore, SAH did not report actual revenue for Quarter 3 2021 and Quarter 4 2021. Cause: SAH did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the report submitted for Period 2 was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 2 was considered incorrect. Amounts reported for quarter 1 through quarter 4 for 2019 and 2020 and quarters 1 and 2 for 2021 did not agree to the underlying internal financial statements. SAH also did not report actual revenue for quarter 3 2021 and quarter 4 2021. Had the proper amounts been reported, the impact would have been to decrease the reported lost revenue by $10,601,620. Questioned Costs: None. Had SAH properly reported patient service revenue for all required quarters, the total calculated lost revenue would have been $1,319,041 versus the $11,920,661 reported, which exceeded the total funds received in period 2. Context: Key line items were tested on the Period 2 HHS report. Recommendation: We recommend SAH enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials and Planned Corrective Action: Management agrees with the noted finding. However, had SAH reported the correct lost revenue figures, SAH satisfactorily incurred eligible expenses and lost revenue in excess of funding expended. Management will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.