Audit 27020

Finding No: 2022 003 Procurement Federal Agency: U.S. Department of Education Pass Through Entity: N/A Assistance Listing Number: 84.425F Program: COVID 19 ? Educational Stabilization Fund Award Year: May 14, 2020 through June 30, 2023 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective Procurement disbursements were related to two vendors. For one of the two vendors tested, open and competitive bidding was not performed and therefore, the System was not in compliance with Federal guidelines. (c) Possible Cause The System has a management review process in place to review and approve procurement transactions in accordance with their procurement policies. The System management review control that was in place did not operate effectively to ensure open and competitive bidding occurred. (d) Questioned Cost $255,415 (e) Effect Without performing the open and competitive bidding process, the System could have charged costs to the grant that were unallowable. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure that the open and competitive bidding process is being performed on all applicable procurement transactions. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist, but did not always operate as designed, relative to management review of expenditures, opportunity exists to retrain staff and further enhance controls. The system acknowledges that all acquisitions of property or services that exceed the simplified acquisition threshold (SAT) of $10,000 under a Federal award or sub award must use formal procurement methods to include documented procurement procedures and methods of procurement. This would include sealed bids, vendor quotes, or noncompetitive procurement where certain conditions apply.

Finding No: 2022 001 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Pass Through Entities: N/A Assistance Listing Number: 93.461 Program: HRSA COVID 19 Claims Reimbursement for the Uninsured Program and the COVID 19 Coverage Assistance Fund Award Year: February 4, 2020 through April 5, 2022 (a) Criteria or Requirement The HRSA COVID 19 Claims Reimbursement for the Uninsured Program and the COVID 19 Coverage Assistance Fund reimburses health care related expenses attributable to COVID 19 testing for the uninsured and treatment of uninsured individuals with COVID 19. Reimbursement includes COVID 19 testing and testing related items, COVID 19 treatment and COVID 19 vaccine administration fees. The HRSA FAQ document dated May 2020 specified that for inpatients COVID 19 must be the primary reason for treatment or for vaccine administration. Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective During our test work, we selected a sample of 50 reimbursements received from HRSA for COVID 19 uninsured claims during the fiscal year. We noted one outpatient instance in which the reimbursement received may have covered the entire patient visit not only the COVID 19 test. (c) Possible Cause When identifying patient activities under the program for the audit period of July 1, 2021 to April 5, 2022 (end of program), total charges for uninsured patients with a COVID 19 diagnosis code, were included in the outpatient submissions for reimbursement. Additionally, HRSA?s reimbursement formulary was never published. (d) Questioned Cost Known questioned costs $5,601 and likely questioned costs $258,764, which represents total outpatient reimbursements for claims without COVID 19 as a primary diagnosis for which reimbursement exceeded $416.78. (e) Effect Federal funds were possibly expended for unallowable purposes as the expenditures were for a diagnosis other than COVID 19 as a primary diagnosis. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System enhance the processes in place to document its review of potential overpayments. (i) View of Responsible Officials FMOL took every precaution to ensure the correct process was implemented for HRSA billing and payment. We followed the program guidelines for screening self pay patients that received COVID services. Once the patient was approved by HRSA, they supplied a patient ID through their provision portal. Those qualifying visits were further modified to bill claims for the approved patients with COVID services and diagnoses. There were instances in which we questioned HRSA to supply further specific details regarding billing and payment, but we were told the information was proprietary. In addition, we questioned SSI (the selected clearinghouse) to query HRSA for additional billing criteria details to be proactive. However, the same response was provided. Therefore, we continued to follow the original program guidelines of identifying, screening and claims submissions for patients receiving COVID services and diagnosis. HRSA would determine the eligible charges upon submission for consideration. In accordance with HRSA guidelines, any overpayment identified by the System is refunded to the program. Any other overpayments identified by HRSA are also refunded accordingly. Additional communication will be provided to team members regarding account documentation with special attention to the HRSA program. We will have the trainer and department managers remind staff members to notate all accounts with any communication and actions taken including those accounts identified for review and repayments as applicable.

Finding No: 2022 002 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Pass Through Entity: N/A Assistance Listing Number: 93.498 Program: COVID 19 ? Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2022 to March 31, 2022 (Period 2) July 1, 2022 to September 30, 2022 (Period 3) (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective During our test work, we performed procedures to recalculate the lost revenue reported in the portal for period 2 and found that the lost revenue calculated by the System was understated by $16,007,000. (c) Possible Cause The System controls to ensure the accuracy of the lost revenue reported for portal period ended September 30, 2022, did not operate effectively. (d) Questioned Cost None (e) Effect The System was in compliance with the program requirement that Federal funds were not expended for unallowable purposes and however, evidence of the effective operation of management review controls was not maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure the accuracy of calculations reported the HRSA portal. (i) View of Responsible Officials Management concurs with the finding. This did not result in an overstatement of qualifying expenditures and no repayment of funding was required. While appropriate controls exist, but did not always operate as designed, relative to management review and recalculation of expenditures, opportunity exists to retrain staff and further enhance controls.

Finding No: 2022 003 Procurement Federal Agency: U.S. Department of Education Pass Through Entity: N/A Assistance Listing Number: 84.425F Program: COVID 19 ? Educational Stabilization Fund Award Year: May 14, 2020 through June 30, 2023 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective Procurement disbursements were related to two vendors. For one of the two vendors tested, open and competitive bidding was not performed and therefore, the System was not in compliance with Federal guidelines. (c) Possible Cause The System has a management review process in place to review and approve procurement transactions in accordance with their procurement policies. The System management review control that was in place did not operate effectively to ensure open and competitive bidding occurred. (d) Questioned Cost $255,415 (e) Effect Without performing the open and competitive bidding process, the System could have charged costs to the grant that were unallowable. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure that the open and competitive bidding process is being performed on all applicable procurement transactions. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist, but did not always operate as designed, relative to management review of expenditures, opportunity exists to retrain staff and further enhance controls. The system acknowledges that all acquisitions of property or services that exceed the simplified acquisition threshold (SAT) of $10,000 under a Federal award or sub award must use formal procurement methods to include documented procurement procedures and methods of procurement. This would include sealed bids, vendor quotes, or noncompetitive procurement where certain conditions apply.

Finding No: 2022 001 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Pass Through Entities: N/A Assistance Listing Number: 93.461 Program: HRSA COVID 19 Claims Reimbursement for the Uninsured Program and the COVID 19 Coverage Assistance Fund Award Year: February 4, 2020 through April 5, 2022 (a) Criteria or Requirement The HRSA COVID 19 Claims Reimbursement for the Uninsured Program and the COVID 19 Coverage Assistance Fund reimburses health care related expenses attributable to COVID 19 testing for the uninsured and treatment of uninsured individuals with COVID 19. Reimbursement includes COVID 19 testing and testing related items, COVID 19 treatment and COVID 19 vaccine administration fees. The HRSA FAQ document dated May 2020 specified that for inpatients COVID 19 must be the primary reason for treatment or for vaccine administration. Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective During our test work, we selected a sample of 50 reimbursements received from HRSA for COVID 19 uninsured claims during the fiscal year. We noted one outpatient instance in which the reimbursement received may have covered the entire patient visit not only the COVID 19 test. (c) Possible Cause When identifying patient activities under the program for the audit period of July 1, 2021 to April 5, 2022 (end of program), total charges for uninsured patients with a COVID 19 diagnosis code, were included in the outpatient submissions for reimbursement. Additionally, HRSA?s reimbursement formulary was never published. (d) Questioned Cost Known questioned costs $5,601 and likely questioned costs $258,764, which represents total outpatient reimbursements for claims without COVID 19 as a primary diagnosis for which reimbursement exceeded $416.78. (e) Effect Federal funds were possibly expended for unallowable purposes as the expenditures were for a diagnosis other than COVID 19 as a primary diagnosis. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System enhance the processes in place to document its review of potential overpayments. (i) View of Responsible Officials FMOL took every precaution to ensure the correct process was implemented for HRSA billing and payment. We followed the program guidelines for screening self pay patients that received COVID services. Once the patient was approved by HRSA, they supplied a patient ID through their provision portal. Those qualifying visits were further modified to bill claims for the approved patients with COVID services and diagnoses. There were instances in which we questioned HRSA to supply further specific details regarding billing and payment, but we were told the information was proprietary. In addition, we questioned SSI (the selected clearinghouse) to query HRSA for additional billing criteria details to be proactive. However, the same response was provided. Therefore, we continued to follow the original program guidelines of identifying, screening and claims submissions for patients receiving COVID services and diagnosis. HRSA would determine the eligible charges upon submission for consideration. In accordance with HRSA guidelines, any overpayment identified by the System is refunded to the program. Any other overpayments identified by HRSA are also refunded accordingly. Additional communication will be provided to team members regarding account documentation with special attention to the HRSA program. We will have the trainer and department managers remind staff members to notate all accounts with any communication and actions taken including those accounts identified for review and repayments as applicable.

Finding No: 2022 002 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Pass Through Entity: N/A Assistance Listing Number: 93.498 Program: COVID 19 ? Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2022 to March 31, 2022 (Period 2) July 1, 2022 to September 30, 2022 (Period 3) (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (b) Condition Found, Including Perspective During our test work, we performed procedures to recalculate the lost revenue reported in the portal for period 2 and found that the lost revenue calculated by the System was understated by $16,007,000. (c) Possible Cause The System controls to ensure the accuracy of the lost revenue reported for portal period ended September 30, 2022, did not operate effectively. (d) Questioned Cost None (e) Effect The System was in compliance with the program requirement that Federal funds were not expended for unallowable purposes and however, evidence of the effective operation of management review controls was not maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure the accuracy of calculations reported the HRSA portal. (i) View of Responsible Officials Management concurs with the finding. This did not result in an overstatement of qualifying expenditures and no repayment of funding was required. While appropriate controls exist, but did not always operate as designed, relative to management review and recalculation of expenditures, opportunity exists to retrain staff and further enhance controls.