(3) Findings and Questioned Costs Relating to Federal Awards
Finding 2022-001
Federal Agency: United States Department of Health and Human Services
Program Name: Provider Relief Fund (PRF)
Assistance Listing Number: 93.498
Criteria:
PRF recipients that received one or more payments exceeding $10,000 in the aggregate during a Payment
Received Period are required to report on several required data elements as part of the post-payment
reporting process. Reporting must be completed and submitted to the Health Resources and Service
Administration (HRSA) the reporting dates specified by HRSA. Additionally, Title 45 U.S. Code of Federal
Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for HHS Awards, section 03(a) states 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. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United
States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Condition:
During our audit procedures for Beth Israel Lahey Health’s PRF Reporting Periods 2 and 3, we identified an
error in the amount reported on the Lost Revenue in Excess of Total Distributions line item for the period of
January 2020 to June 2021 for Beth Israel Deaconess Medical Center (BIDMC). Management incorrectly
utilized the same quarterly budget amount for Quarter 3 and Quarter 4 within their internal lost revenue
calculations spreadsheet. The error resulted in $160,417,776 being reported as Lost Revenue in Excess of
Total Distributions within the report instead of $167,748,797, or understating the lost revenue amount by
$7,331,021.
We deemed this to be a significant deficiency in internal controls.
Cause:
The condition found results from the existing internal control review over the accuracy of the underlying
data used to prepare the report not being performed at a precision level that detected the error duplicating
the budget amounts from Quarter 3 to Quarter 4.
Possible Asserted Effect:
Failure to ensure accuracy of amounts reported as “Lost Revenues in Excess of Total Distributions” may
result in HRSA relying on incomplete or inaccurate information associated to the BILH’s utilization of PRF
funds.
Questioned Costs:
None.
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend BILH enhance its internal controls over PRF reporting to ensure each of the data elements
reported to HRSA are accurate and result in amounts consistent with its underlying records.
Views of Responsible Officials:
Management will enhance its internal controls over PRF reporting by requiring co-sign off by the VP of
System Services Accounting and the VP of Revenue/Reimbursement.
Finding 2022-02 – Reporting
Program: COVID-19 Disaster Grants – Public Assistance (Presidentially
Declared Disasters)
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Number: 97.036
Criteria:
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance) Subpart F – Audit Requirements §200.510
requires the auditee to prepare a schedule of expenditures of Federal awards for the period covered by the
auditee’s financial statements which must include the total Federal awards expended as determined in
accordance with §200.502. The Uniform Guidance requires the auditor to determine whether the auditee’s
schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the audited
entity’s financial statements as a whole. In addition, the Uniform Guidance places the responsibility for
identifying major programs on the auditor and the schedule of expenditures of federal awards serves as the
primary basis for the auditor’s major program determination. Therefore, appropriate major program
determination by the auditor is dependent on the accuracy and completeness of the information in the
schedule of expenditures of federal awards.
Condition:
In preparation of the schedule of expenditures for federal awards (SEFA) management did not record the
COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) expenditures on the
SEFA which resulted in the SEFA being understated by $14,249,269.
We deemed this to be a material weakness in internal controls.
Cause:
BILH did not have an adequately designed internal control to identify the error in federal awards expended
as such, the amount of the errors could have been greater and not detected by BILH’s control environment.
Possible Asserted Effect:
Potential misstatement to the schedule of expenditures of federal awards.
Questioned Costs:
None noted
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that BILH implement a more thorough and detailed process for preparing and reviewing
the SEFA to identify adjustments that could result in a misstatement of the SEFA. This should include a
formalized and detailed review of the SEFA and a reconciliation to the general ledger and financial
statements by someone other than the preparer.
Views of Responsible Officials:
Management will enhance its review process by requiring a formal second sign-off of the SEFA with
supporting documents.
(3) Findings and Questioned Costs Relating to Federal Awards
Finding 2022-001
Federal Agency: United States Department of Health and Human Services
Program Name: Provider Relief Fund (PRF)
Assistance Listing Number: 93.498
Criteria:
PRF recipients that received one or more payments exceeding $10,000 in the aggregate during a Payment
Received Period are required to report on several required data elements as part of the post-payment
reporting process. Reporting must be completed and submitted to the Health Resources and Service
Administration (HRSA) the reporting dates specified by HRSA. Additionally, Title 45 U.S. Code of Federal
Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for HHS Awards, section 03(a) states 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. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United
States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Condition:
During our audit procedures for Beth Israel Lahey Health’s PRF Reporting Periods 2 and 3, we identified an
error in the amount reported on the Lost Revenue in Excess of Total Distributions line item for the period of
January 2020 to June 2021 for Beth Israel Deaconess Medical Center (BIDMC). Management incorrectly
utilized the same quarterly budget amount for Quarter 3 and Quarter 4 within their internal lost revenue
calculations spreadsheet. The error resulted in $160,417,776 being reported as Lost Revenue in Excess of
Total Distributions within the report instead of $167,748,797, or understating the lost revenue amount by
$7,331,021.
We deemed this to be a significant deficiency in internal controls.
Cause:
The condition found results from the existing internal control review over the accuracy of the underlying
data used to prepare the report not being performed at a precision level that detected the error duplicating
the budget amounts from Quarter 3 to Quarter 4.
Possible Asserted Effect:
Failure to ensure accuracy of amounts reported as “Lost Revenues in Excess of Total Distributions” may
result in HRSA relying on incomplete or inaccurate information associated to the BILH’s utilization of PRF
funds.
Questioned Costs:
None.
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend BILH enhance its internal controls over PRF reporting to ensure each of the data elements
reported to HRSA are accurate and result in amounts consistent with its underlying records.
Views of Responsible Officials:
Management will enhance its internal controls over PRF reporting by requiring co-sign off by the VP of
System Services Accounting and the VP of Revenue/Reimbursement.
Finding 2022-02 – Reporting
Program: COVID-19 Disaster Grants – Public Assistance (Presidentially
Declared Disasters)
Federal Agency: U.S. Department of Homeland Security
Assistance Listing Number: 97.036
Criteria:
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance) Subpart F – Audit Requirements §200.510
requires the auditee to prepare a schedule of expenditures of Federal awards for the period covered by the
auditee’s financial statements which must include the total Federal awards expended as determined in
accordance with §200.502. The Uniform Guidance requires the auditor to determine whether the auditee’s
schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the audited
entity’s financial statements as a whole. In addition, the Uniform Guidance places the responsibility for
identifying major programs on the auditor and the schedule of expenditures of federal awards serves as the
primary basis for the auditor’s major program determination. Therefore, appropriate major program
determination by the auditor is dependent on the accuracy and completeness of the information in the
schedule of expenditures of federal awards.
Condition:
In preparation of the schedule of expenditures for federal awards (SEFA) management did not record the
COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) expenditures on the
SEFA which resulted in the SEFA being understated by $14,249,269.
We deemed this to be a material weakness in internal controls.
Cause:
BILH did not have an adequately designed internal control to identify the error in federal awards expended
as such, the amount of the errors could have been greater and not detected by BILH’s control environment.
Possible Asserted Effect:
Potential misstatement to the schedule of expenditures of federal awards.
Questioned Costs:
None noted
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that BILH implement a more thorough and detailed process for preparing and reviewing
the SEFA to identify adjustments that could result in a misstatement of the SEFA. This should include a
formalized and detailed review of the SEFA and a reconciliation to the general ledger and financial
statements by someone other than the preparer.
Views of Responsible Officials:
Management will enhance its review process by requiring a formal second sign-off of the SEFA with
supporting documents.