Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness
Repeat Finding - No
Criteria - According to 2 CFR § 200.303, HealthSource must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition - HealthSource does not have a review process in place related to the Covid expense spreadsheet and lost revenue calculation used to input expenses into the required reporting submissions to the U.S. Department of Health and Human Services for the Provider Relief Fund program. HeathSource also did not have a review process in place for the required submissions.
Questioned Costs - None
Context - There was no independent review completed on the Covid expense spreadsheet, lost revenue calculation, or the reporting submission to evaluate the completeness and accuracy of the submission.
Cause and Effect - The lack of an independent review of the Covid expense spreadsheet and the reporting submission could result in an increased risk of incomplete or inaccurate information included in the reporting submission.
Recommendation - HealthSource should implement a process to ensure an independent review of the reporting submission and the documents used to input information into the reporting submission, such as the Covid expense spreadsheet, is completed prior to finalization.
Views of Responsible Officials and Corrective Action Plan - Management agrees with the finding and will implement a process to ensure an independent review of the reporting submission and its supporting documents is completed prior to finalization.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Per the Provider Relief Fund, General and Targeted Distribution Post-Payment Notice of Reporting Requirements, dated June 11, 2021, expenses that are paid for with General and Targeted PRF payments must be those that are unreimbursed by other sources and that other sources are not obligated to reimburse. Additionally, recipients may choose to apply PRF payments toward lost revenue using one of three options, up to the amount:
Option i: of the difference between actual patient care revenue;
Option ii: of the difference between budgeted (prior to March 27, 2020) and actual patient care revenue; or
Option iii: calculated by any reasonable method of estimating revenue.
Condition - HealthSource's controls in place for reporting submissions did not identify that guidelines were not followed related to expense reporting and the lost revenue calculations.
Questioned Costs - None
Context - The reporting submission for period 2 applied the same Other Provider Relief Fund Expenses to PRF payments that were previously input and applied to payments reported on HealthSource's reporting submission for period 1. Additionally, the reporting submission for lost revenue did not follow the acceptable options provided by the Department of Health and Human Services. Recipients may choose to apply Provider Relief Fund payments toward lost revenue using one of three options: (i) up to the amount of the difference between actual patient care revenue, (ii) up to the amount of the difference between budgeted (if approved prior to March 27, 2020) and actual patient care revenue, or (iii) up to the amount calculated by any reasonable method of estimating revenue. HealthSource used option ii to calculate lost revenue but reported an incorrect total of budgeted and actual revenue in one of the quarters included in the submission. If HealthSource had reported the accurate actual and budgeted revenue amount, it would still have qualified to recognize all PRF payments received in period 1. Additionally, the budgeted amounts used in the submission for all quarters of 2021 were not approved by March 27, 2020; therefore, option ii was not allowable. HealthSource should have used option iii to report lost revenue.
Cause and Effect - Appropriate review of the reporting submission was not completed to ensure the report followed the required guidelines. As a result, the report submitted was inaccurate.
Recommendation - We recommend HealthSource implement controls, including levels of review, to ensure reports are completed and submitted in accordance with guidelines established by HHS.
Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and all future submissions will be reviewed by the chief executive officer and the president for accuracy and thoroughness prior to submission upload.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - According to 2 CFR § 200.403, HealthSource must maintain adequate documentation to support the allowability of costs charged to the grant.
Condition - HealthSource did not have controls in place to ensure the inputs in their Covid related expense spreadsheet that was used to input the amount of Other PRF Expenses reported in the portal submissions agreed to source documentation.
Questioned Costs - None
Context - The CFO created a spreadsheet to track HealthSource's Covid related payroll expenses using an incremental cost approach. To create this spreadsheet, the CFO used multiple formulas and pulled information from various summary level reports. There was no review completed on HealthSource's Covid related expense spreadsheet after the CFO prepared it. The spreadsheet was subsequently used by the CFO to input expenses into the portal submissions.
Cause and Effect - Appropriate review of the Covid related expense spreadsheet was not completed to ensure the inputs in the report agreed to supporting documentation. As a result, the report contained several inconsistencies and it is not possible to determine whether the expenses are allowable under the grant agreement.
Recommendation - We recommend HealthSource implement controls, including levels of review, to ensure reports are accurate and can be agreed back to source documentation.
Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and all future submissions will be reviewed by the chief executive officer and the president for accuracy and thoroughness prior to submission upload.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness
Repeat Finding - No
Criteria - According to 2 CFR § 200.303, HealthSource must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition - HealthSource does not have a review process in place related to the Covid expense spreadsheet and lost revenue calculation used to input expenses into the required reporting submissions to the U.S. Department of Health and Human Services for the Provider Relief Fund program. HeathSource also did not have a review process in place for the required submissions.
Questioned Costs - None
Context - There was no independent review completed on the Covid expense spreadsheet, lost revenue calculation, or the reporting submission to evaluate the completeness and accuracy of the submission.
Cause and Effect - The lack of an independent review of the Covid expense spreadsheet and the reporting submission could result in an increased risk of incomplete or inaccurate information included in the reporting submission.
Recommendation - HealthSource should implement a process to ensure an independent review of the reporting submission and the documents used to input information into the reporting submission, such as the Covid expense spreadsheet, is completed prior to finalization.
Views of Responsible Officials and Corrective Action Plan - Management agrees with the finding and will implement a process to ensure an independent review of the reporting submission and its supporting documents is completed prior to finalization.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Per the Provider Relief Fund, General and Targeted Distribution Post-Payment Notice of Reporting Requirements, dated June 11, 2021, expenses that are paid for with General and Targeted PRF payments must be those that are unreimbursed by other sources and that other sources are not obligated to reimburse. Additionally, recipients may choose to apply PRF payments toward lost revenue using one of three options, up to the amount:
Option i: of the difference between actual patient care revenue;
Option ii: of the difference between budgeted (prior to March 27, 2020) and actual patient care revenue; or
Option iii: calculated by any reasonable method of estimating revenue.
Condition - HealthSource's controls in place for reporting submissions did not identify that guidelines were not followed related to expense reporting and the lost revenue calculations.
Questioned Costs - None
Context - The reporting submission for period 2 applied the same Other Provider Relief Fund Expenses to PRF payments that were previously input and applied to payments reported on HealthSource's reporting submission for period 1. Additionally, the reporting submission for lost revenue did not follow the acceptable options provided by the Department of Health and Human Services. Recipients may choose to apply Provider Relief Fund payments toward lost revenue using one of three options: (i) up to the amount of the difference between actual patient care revenue, (ii) up to the amount of the difference between budgeted (if approved prior to March 27, 2020) and actual patient care revenue, or (iii) up to the amount calculated by any reasonable method of estimating revenue. HealthSource used option ii to calculate lost revenue but reported an incorrect total of budgeted and actual revenue in one of the quarters included in the submission. If HealthSource had reported the accurate actual and budgeted revenue amount, it would still have qualified to recognize all PRF payments received in period 1. Additionally, the budgeted amounts used in the submission for all quarters of 2021 were not approved by March 27, 2020; therefore, option ii was not allowable. HealthSource should have used option iii to report lost revenue.
Cause and Effect - Appropriate review of the reporting submission was not completed to ensure the report followed the required guidelines. As a result, the report submitted was inaccurate.
Recommendation - We recommend HealthSource implement controls, including levels of review, to ensure reports are completed and submitted in accordance with guidelines established by HHS.
Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and all future submissions will be reviewed by the chief executive officer and the president for accuracy and thoroughness prior to submission upload.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - According to 2 CFR § 200.403, HealthSource must maintain adequate documentation to support the allowability of costs charged to the grant.
Condition - HealthSource did not have controls in place to ensure the inputs in their Covid related expense spreadsheet that was used to input the amount of Other PRF Expenses reported in the portal submissions agreed to source documentation.
Questioned Costs - None
Context - The CFO created a spreadsheet to track HealthSource's Covid related payroll expenses using an incremental cost approach. To create this spreadsheet, the CFO used multiple formulas and pulled information from various summary level reports. There was no review completed on HealthSource's Covid related expense spreadsheet after the CFO prepared it. The spreadsheet was subsequently used by the CFO to input expenses into the portal submissions.
Cause and Effect - Appropriate review of the Covid related expense spreadsheet was not completed to ensure the inputs in the report agreed to supporting documentation. As a result, the report contained several inconsistencies and it is not possible to determine whether the expenses are allowable under the grant agreement.
Recommendation - We recommend HealthSource implement controls, including levels of review, to ensure reports are accurate and can be agreed back to source documentation.
Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and all future submissions will be reviewed by the chief executive officer and the president for accuracy and thoroughness prior to submission upload.