Audit 292538

Information on Federal Programs U.S. Department of Health and Human Services: AL No. 93.498 Provider Relief Fund; Award Year: Periods 5: January 1, 2022 to June 30, 2022 Specific Requirements/Criteria The terms and conditions for participation in the Provider Relief Fund (PRF) specifies that the relief payments provided will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus and “not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period” (2-CFR Part 200.403). Condition During our testing of the internal controls and compliance over the Activities Allowed and Unallowed process, we noted controls that were designed to ensure that costs reported as Other PRF Expenses on the PRF report were not previously included as a cost in another federally financed program, were ineffective in certain circumstances. To test the compliance with this requirement, we tested a total of 60 expense transactions to ensure the expense was incurred and attributable to coronavirus as per the terms and conditions. Of the 60 expense transactions tested, 7 related to depreciation expense. We noted 5 of the 7 depreciation transactions were previously submitted as a cost of federal program FEMA (ALN 97.036) and were therefore not allowable under ALN 93.498. Depreciation related to these 5 transactions totaled $4,335. Total depreciation expenses included in the PRF report as Reportable Other PRF Expenses for Payments Received During the Payment Period for the year ending June 30, 2023 was $162,489. The sample was not intended to be, and was not, a statistically valid sample. Cause The above finding was caused by the control not being designed with sufficient precision to ensure a detail level of review was conducted to identify whether or not the depreciation expenses included in the PRF report as Reportable Other PRF Expenses for Payments Received During the Payment Period were previously submitted for reimbursement under another federal program. Effect The line item titled Total Reportable Other PRF Expenses in the PRF Period 5 submission report is misstated as of June 30, 2023 because unallowable costs were included in the PRF report as Reportable Other PRF Expenses. Given the Association’s balance of Lost Revenues per the Period 5 submission at $27M is sufficient to absorb the balance of likely and known unallowable costs reported in the period 5 submission as Reportable Other PRF Expenses, this finding would not cause a remittance of federal funds received, and the SEFA does not include unallowable costs in the aggregate. The effect of this finding is the classification of the use of Other PRF Payments Received within the PRF Period 5 submission report is inaccurate. Questioned Costs $0 Repeat Finding from Prior Year Yes – Finding 2022-001 Recommendation We recommend that the Association implement procedures and policies to ensure that the amounts reported as Other PRF Expenses are not claimed for reimbursement under other federal programs. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding and recommendation. Internal controls will be strengthened in future periods to ensure that ledger details for reimbursement requests will be filtered to exclude depreciation for costs already considered during the review of capital expenditures. The Director of Finance will review ledger details prior to submission to ensure only appropriate ledger accounts are included.

Information on Federal Programs U.S. Department of Health and Human Services: AL No. 93.498 Provider Relief Fund; Award Year: Periods 5: January 1, 2022 to June 30, 2022 Specific Requirements/Criteria The terms and conditions for participation in the Provider Relief Fund (PRF) specifies that the relief payments provided will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus and “not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period” (2-CFR Part 200.403). Condition During our testing of the internal controls and compliance over the Activities Allowed and Unallowed process, we noted controls that were designed to ensure that costs reported as Other PRF Expenses on the PRF report were not previously included as a cost in another federally financed program, were ineffective in certain circumstances. To test the compliance with this requirement, we tested a total of 60 expense transactions to ensure the expense was incurred and attributable to coronavirus as per the terms and conditions. Of the 60 expense transactions tested, 7 related to depreciation expense. We noted 5 of the 7 depreciation transactions were previously submitted as a cost of federal program FEMA (ALN 97.036) and were therefore not allowable under ALN 93.498. Depreciation related to these 5 transactions totaled $4,335. Total depreciation expenses included in the PRF report as Reportable Other PRF Expenses for Payments Received During the Payment Period for the year ending June 30, 2023 was $162,489. The sample was not intended to be, and was not, a statistically valid sample. Cause The above finding was caused by the control not being designed with sufficient precision to ensure a detail level of review was conducted to identify whether or not the depreciation expenses included in the PRF report as Reportable Other PRF Expenses for Payments Received During the Payment Period were previously submitted for reimbursement under another federal program. Effect The line item titled Total Reportable Other PRF Expenses in the PRF Period 5 submission report is misstated as of June 30, 2023 because unallowable costs were included in the PRF report as Reportable Other PRF Expenses. Given the Association’s balance of Lost Revenues per the Period 5 submission at $27M is sufficient to absorb the balance of likely and known unallowable costs reported in the period 5 submission as Reportable Other PRF Expenses, this finding would not cause a remittance of federal funds received, and the SEFA does not include unallowable costs in the aggregate. The effect of this finding is the classification of the use of Other PRF Payments Received within the PRF Period 5 submission report is inaccurate. Questioned Costs $0 Repeat Finding from Prior Year Yes – Finding 2022-001 Recommendation We recommend that the Association implement procedures and policies to ensure that the amounts reported as Other PRF Expenses are not claimed for reimbursement under other federal programs. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding and recommendation. Internal controls will be strengthened in future periods to ensure that ledger details for reimbursement requests will be filtered to exclude depreciation for costs already considered during the review of capital expenditures. The Director of Finance will review ledger details prior to submission to ensure only appropriate ledger accounts are included.