Audit 301031

FY End

2023-06-30

Total Expended

$1.23M

Findings

2

Programs

3

Organization: Barnes-Kasson County Hospital (PA)

Year: 2023 Accepted: 2024-03-29

Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
390138	2023-002	Material Weakness	-	L
966580	2023-002	Material Weakness	-	L

ALN	Program	Spent	Major	Findings
93.498	Provider Relief Fund	$1.18M	Yes	1
93.912	Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement	$45,253	-	0
32.006	Covid-19 Telehealth Program	$9,990	-	0

Contacts

Name	Title	Type
EZQFGN1PG8P7	Kelli Kane	Auditee
5708533135	Mike Kessler	Auditor
No contacts on file

Notes to SEFA

Title: 3. Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution - Assistance Listing Number 93.498 Accounting Policies: 1. Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Barnes-Kasson County Hospital (the Hospital) under programs of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Hospital, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Hospital. 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting, with exception of expenditures associated with the U.S. Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF). These expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Schedule reports expenditures associated with the U.S. Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF). For the awards related to the PRF, the HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) PRF Reporting Portal. Payments from HHS for PRF are assigned to "Payment Received Periods" (each, a Period) based upon the date each payment from the PRF was received. Each Period has a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end of the Period of Availability). De Minimis Rate Used: N Rate Explanation: The Hospital has not elected to use the 10% de minimis indirect cost rate. There are no indirect costs. The Schedule includes $1,177,041 of funding received from the HRSA between July 1, 2021 and December 31, 2021. In accordance with guidance from the HHS, the amounts received are presented on the Schedule as Period 4 expenditures. Such amounts were reported as being received and recognized as a component of federal and state awards revenue in the year ended June 30, 2022. The PRF program amounts presented in the Schedule are associated with the Hospital's tax identification number, which is 24-0798681.

Finding Details

Finding 2023-002

Finding 2023-001: Material Weakness in Internal Controls over Compliance – Reporting Lost Revenues Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Award Number: N/A Award Year: 2022/2023 Federal Agency: U.S. Department of Health and Human Services Passed-Through Agency: N/A Questioned Costs: None Noted 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 Fund and American Rescue Plan (ARP) Rural Distribution (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. Activities allowed have been defined as expense used to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. 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. Condition/Context: The Hospital did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. We noted that the Hospital erroneously entered information into the lost revenue calculation, resulting in lost revenues being understated $1,020,030. The Hospital reported lost revenues amounting to $999,172 on distributions totaling $1,177,041. The Hospital had excess lost revenues from previous periods available to be used through June 30, 2023 amounting to $5,406,884. The Hospital also reported expenses of $907,051. Cause: The Hospital's review was inadequate. Effect: The amounts reported to HRSA were not in accordance with established U.S. Department of Health and Human Services guidance. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in accumulating allowable lost revenues is reviewed, with errors addressed prior to submission. Views of Responsible Officials: The Hospital agrees with the finding.

Finding 2023-002

Finding 2023-001: Material Weakness in Internal Controls over Compliance – Reporting Lost Revenues Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Award Number: N/A Award Year: 2022/2023 Federal Agency: U.S. Department of Health and Human Services Passed-Through Agency: N/A Questioned Costs: None Noted 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 Fund and American Rescue Plan (ARP) Rural Distribution (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. Activities allowed have been defined as expense used to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. 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. Condition/Context: The Hospital did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. We noted that the Hospital erroneously entered information into the lost revenue calculation, resulting in lost revenues being understated $1,020,030. The Hospital reported lost revenues amounting to $999,172 on distributions totaling $1,177,041. The Hospital had excess lost revenues from previous periods available to be used through June 30, 2023 amounting to $5,406,884. The Hospital also reported expenses of $907,051. Cause: The Hospital's review was inadequate. Effect: The amounts reported to HRSA were not in accordance with established U.S. Department of Health and Human Services guidance. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in accumulating allowable lost revenues is reviewed, with errors addressed prior to submission. Views of Responsible Officials: The Hospital agrees with the finding.