Finding 2022-001 Significant Deficiency in Internal Control - Reporting
Repeat of Prior Audit Finding 2021-001
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services. Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS).
Condition/Context: During our testing of the two reports required to be submitted for period 3 for
St. Barnabas Health System, Inc. and St. Barnabas Nursing Home, Inc. (Nursing Home), we noted that both reports were not completed in accordance with the established guidance from HHS. Specifically, the Health System did not properly report lost revenues as a basis for claiming the distributions for the St. Barnabas Health System, Inc. report which contained only general distributions and for the Nursing Home report, they failed to report eligible expenses to claim the targeted distribution as they had intended. This issue was noted in the prior year finding 2021-001. However, due to the timing of completing the 2021 audit, the issue was not identified prior to the period 3 reporting and therefore, is a repeat finding.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was unable to implement their planned corrective actions to address the issue for their period 3 report due to the timing of the communication from the 2021 audit.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was unable to implement the planned corrective actions to address the issue for our period 3 report due to the timing of the communication from the 2021 audit. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-001 Significant Deficiency in Internal Control - Reporting
Repeat of Prior Audit Finding 2021-001
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services. Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS).
Condition/Context: During our testing of the two reports required to be submitted for period 3 for
St. Barnabas Health System, Inc. and St. Barnabas Nursing Home, Inc. (Nursing Home), we noted that both reports were not completed in accordance with the established guidance from HHS. Specifically, the Health System did not properly report lost revenues as a basis for claiming the distributions for the St. Barnabas Health System, Inc. report which contained only general distributions and for the Nursing Home report, they failed to report eligible expenses to claim the targeted distribution as they had intended. This issue was noted in the prior year finding 2021-001. However, due to the timing of completing the 2021 audit, the issue was not identified prior to the period 3 reporting and therefore, is a repeat finding.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was unable to implement their planned corrective actions to address the issue for their period 3 report due to the timing of the communication from the 2021 audit.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was unable to implement the planned corrective actions to address the issue for our period 3 report due to the timing of the communication from the 2021 audit. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-002 Significant Deficiency in Internal Control - Reporting
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services (HHS). Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Specifically, as outlined in the Provider Relief Fund and ARP Rural Payments Frequently Asked Questions, dated May 5, 2023, if a Report Entity wishes to offset unallowable costs identified during an audit through a subsequent reporting period, the entity should ensure that lost revenues reported in a subsequent report are deducted to avoid “double dipping” due to the cumulative nature of lost revenues. Any lost revenue adjustments may be made in subsequent reporting periods and the Reporting Entity should maintain appropriate documentation to support the deduction from the report.
Condition/Context: During our testing of the Period 4 report for St. Barnabas Health System, Inc., we noted that the Health System did not properly reflect the adjustment to the lost revenues to correct the errors from Periods 1 - 3 reports identified by the audit as indicated in the guidance from HHS. Specifically, the lost revenues should have been reduced by the cumulative amount of period 1 - 3 general distributions received, totaling $1,374,209. This would reduce the total amount of available lost revenue for period 4 to $13,685,628.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was not aware of the Frequently Asked Question related to handling corrections in subsequent reporting periods.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was not aware of the Frequently Asked Question related to addressing corrections in subsequent reporting periods. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-002 Significant Deficiency in Internal Control - Reporting
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services (HHS). Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Specifically, as outlined in the Provider Relief Fund and ARP Rural Payments Frequently Asked Questions, dated May 5, 2023, if a Report Entity wishes to offset unallowable costs identified during an audit through a subsequent reporting period, the entity should ensure that lost revenues reported in a subsequent report are deducted to avoid “double dipping” due to the cumulative nature of lost revenues. Any lost revenue adjustments may be made in subsequent reporting periods and the Reporting Entity should maintain appropriate documentation to support the deduction from the report.
Condition/Context: During our testing of the Period 4 report for St. Barnabas Health System, Inc., we noted that the Health System did not properly reflect the adjustment to the lost revenues to correct the errors from Periods 1 - 3 reports identified by the audit as indicated in the guidance from HHS. Specifically, the lost revenues should have been reduced by the cumulative amount of period 1 - 3 general distributions received, totaling $1,374,209. This would reduce the total amount of available lost revenue for period 4 to $13,685,628.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was not aware of the Frequently Asked Question related to handling corrections in subsequent reporting periods.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was not aware of the Frequently Asked Question related to addressing corrections in subsequent reporting periods. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-001 Significant Deficiency in Internal Control - Reporting
Repeat of Prior Audit Finding 2021-001
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services. Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS).
Condition/Context: During our testing of the two reports required to be submitted for period 3 for
St. Barnabas Health System, Inc. and St. Barnabas Nursing Home, Inc. (Nursing Home), we noted that both reports were not completed in accordance with the established guidance from HHS. Specifically, the Health System did not properly report lost revenues as a basis for claiming the distributions for the St. Barnabas Health System, Inc. report which contained only general distributions and for the Nursing Home report, they failed to report eligible expenses to claim the targeted distribution as they had intended. This issue was noted in the prior year finding 2021-001. However, due to the timing of completing the 2021 audit, the issue was not identified prior to the period 3 reporting and therefore, is a repeat finding.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was unable to implement their planned corrective actions to address the issue for their period 3 report due to the timing of the communication from the 2021 audit.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was unable to implement the planned corrective actions to address the issue for our period 3 report due to the timing of the communication from the 2021 audit. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-001 Significant Deficiency in Internal Control - Reporting
Repeat of Prior Audit Finding 2021-001
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services. Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS).
Condition/Context: During our testing of the two reports required to be submitted for period 3 for
St. Barnabas Health System, Inc. and St. Barnabas Nursing Home, Inc. (Nursing Home), we noted that both reports were not completed in accordance with the established guidance from HHS. Specifically, the Health System did not properly report lost revenues as a basis for claiming the distributions for the St. Barnabas Health System, Inc. report which contained only general distributions and for the Nursing Home report, they failed to report eligible expenses to claim the targeted distribution as they had intended. This issue was noted in the prior year finding 2021-001. However, due to the timing of completing the 2021 audit, the issue was not identified prior to the period 3 reporting and therefore, is a repeat finding.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was unable to implement their planned corrective actions to address the issue for their period 3 report due to the timing of the communication from the 2021 audit.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was unable to implement the planned corrective actions to address the issue for our period 3 report due to the timing of the communication from the 2021 audit. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-002 Significant Deficiency in Internal Control - Reporting
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services (HHS). Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Specifically, as outlined in the Provider Relief Fund and ARP Rural Payments Frequently Asked Questions, dated May 5, 2023, if a Report Entity wishes to offset unallowable costs identified during an audit through a subsequent reporting period, the entity should ensure that lost revenues reported in a subsequent report are deducted to avoid “double dipping” due to the cumulative nature of lost revenues. Any lost revenue adjustments may be made in subsequent reporting periods and the Reporting Entity should maintain appropriate documentation to support the deduction from the report.
Condition/Context: During our testing of the Period 4 report for St. Barnabas Health System, Inc., we noted that the Health System did not properly reflect the adjustment to the lost revenues to correct the errors from Periods 1 - 3 reports identified by the audit as indicated in the guidance from HHS. Specifically, the lost revenues should have been reduced by the cumulative amount of period 1 - 3 general distributions received, totaling $1,374,209. This would reduce the total amount of available lost revenue for period 4 to $13,685,628.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was not aware of the Frequently Asked Question related to handling corrections in subsequent reporting periods.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was not aware of the Frequently Asked Question related to addressing corrections in subsequent reporting periods. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.
Finding 2022-002 Significant Deficiency in Internal Control - Reporting
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Not applicable
Award Number / Year: Not applicable / 2021
Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of
2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Provider Relief Funds (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the
U.S. Department of Health and Human Services (HHS). Additionally, all recipients of PRF payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Specifically, as outlined in the Provider Relief Fund and ARP Rural Payments Frequently Asked Questions, dated May 5, 2023, if a Report Entity wishes to offset unallowable costs identified during an audit through a subsequent reporting period, the entity should ensure that lost revenues reported in a subsequent report are deducted to avoid “double dipping” due to the cumulative nature of lost revenues. Any lost revenue adjustments may be made in subsequent reporting periods and the Reporting Entity should maintain appropriate documentation to support the deduction from the report.
Condition/Context: During our testing of the Period 4 report for St. Barnabas Health System, Inc., we noted that the Health System did not properly reflect the adjustment to the lost revenues to correct the errors from Periods 1 - 3 reports identified by the audit as indicated in the guidance from HHS. Specifically, the lost revenues should have been reduced by the cumulative amount of period 1 - 3 general distributions received, totaling $1,374,209. This would reduce the total amount of available lost revenue for period 4 to $13,685,628.
Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance.
Questioned Costs: None noted.
Cause: The Health System was not aware of the Frequently Asked Question related to handling corrections in subsequent reporting periods.
Recommendation: We recommend management work with the federal agency to correct reporting errors outlined above through a revision to past reporting, providing additional documentation directly to the agency, or updates via future reporting, as applicable and deemed appropriate by the federal agency official.
Views of Responsible Officials: The Health System was not aware of the Frequently Asked Question related to addressing corrections in subsequent reporting periods. The Health System will work with HRSA to correct reporting errors outlined above as deemed appropriate by HRSA.