Audit 301098

2023-001: (A) (B) Unallowed COVID-19 expenditures reported within the Health Resources Services Administration (HRSA) Provider Relief Fund (PRF) Portal, Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Distribution, Assistance Listing Number: 93.498, Agency: Department of Health and Human Services (HHS), Award Year: 1/1/2020-6/30/2023, Award Number: Not available Criteria Law (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) notes that PRFs should be 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, these funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition The University of Rochester and Related Entities had 11 Period 4 submissions and 2 Period 5 submissions into the HRSA portal. Period 4 reporting was completed by the following entities: 1. University of Rochester, 2. UR Medicine Home Care, Certified Services, Inc., 3. St. James Hospital, 4. The Frederick Ferris Thompson Hospital, 5. MM Ewing Continuing Care Center, 6. Nicholas H. Noyes Memorial Hospital, 7. Memorial Hospital of William F and Gertrude F Jones Inc. 8. The Highlands Living Center Inc., 9. Highland Hospital of Rochester,10. Meadows at Westfall, Inc., and 11. FFT Senior Communities, Inc. Period 5 reporting was completed by the following entities: 1. UR Medicine Home Care, Certified Services, and 2. Highland Community Development Corp (d/b/a Highlands at Pittsford). From the detailed listing of expenses across the Period 4 HRSA submissions, we performed allowability testing of the “Unreimbursed Expenses Attributable to Coronavirus” in accordance with the Department of Health and Human Services (HHS) terms and conditions. The following table illustrates COVID-19 expenditures overstated (unallowable expenditure) in the Period 4 HRSA submissions by entity, by quarter and in total on a consolidated basis across the organization. Entities Other PRF Expenses Quarter 3 (July - September 2021) Quarter 4 (October - December 2021) Quarter 1 (January - March 2022) Total Overstated expenses UR Medicine Home Care Personnel 445 445 Nicholas H. Noyes Memorial Hospital Supplies 104,368 104,368 St. James Hospital Personnel 240 98,279 98,519 Total - Overstated expenses $ 240 $ 98,724 $ 104,368 $ 203,332 Cause The causes of the issues noted above were due to a lack of consistency in tracking and reviewing COVID-19 expenditures for inclusion in the Period 4 reporting across the organization. Effect University of Rochester and Related Entities’ Period 4 HRSA Reporting Portal submissions inaccurately captured total “Other PRF Expenses”. Questioned Costs UR Medicine Home Care had $445 of unallowable costs, however reported $1,362,892 million of unused lost revenues on the Phase 4 HRSA report. Nicholas H. Noyes Memorial Hospital had $104,368 of unallowable costs, however reported $1,818,103 of unused lost revenues on the Phase 4 HRSA report. St. James Hospital had $98,519 of unallowable costs, however reported lost revenue available to be used in the current reporting period was $203,524. As there were sufficient lost revenues for each entity, there are no questioned costs associated with this finding. Recommendation We recommend (should there be future funding) management ensure that the organization-wide policy for tracking and reviewing COVID-19 expenditures is implemented more consistently across entities. This will help ensure completeness and accuracy of future federal report and/or HRSA Reporting portal submissions. Additionally, we recommend management communicate the errors noted in the submissions to HRSA and request advice for how to correct this error.

2023-002: (L) Reporting of Unreimbursed Expenses Attributable to Coronavirus and Lost Revenues, within the Health Resources Services Administration (HRSA) Provider Relief Fund Portal, Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Distribution, Assistance Listing Number: 93.498, Agency: Department of Health and Human Services (HHS), Award Year: 1/1/2023-3/31/2023, Award Number: Not available Criteria Law (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) notes that PRFs should be 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, these funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition Through testing of Period 4 HRSA portal submissions, we identified the following: St James Hospital: • Personnel costs of $466,729 were all reported in quarter 3 of 2021 on the Phase 4 HRSA report. These costs related to incentive pay and were expensed from July 2021 through June 2022, and should have been allocated between Q3 2021 – Q2 2022 instead of all in Q3 2021. Costs were determined to be allowable, reporting error only. The reporting for the quarters noted below were over/under stated by the following amounts due to this: Quarter 3(July - September 2021) Quarter 4(October - December 2021) Quarter 1(January - March 2022) Quarter 2(April-June 2022) Total Over (Under) stated $376,523 $(184,184) $(108,609) $(83,730) $0 • Lost revenue calculation inaccurately overstated actual 2021 revenues as management did not include actual revenue net of bad debt expense in the quarterly totals for calendar year 2021. The Phase 4 HRSA report included no eligible lost revenue for 2021, and using the corrected amount of revenue net of bad debt expense does not change this conclusion. The report was corrected to properly state actual 2021 revenue. Memorial Hospital of William F and Gertrude F Jones Inc.: • Supply costs related to COVID-19 tests were reported on an equal allocation across quarters verses in actual amounts across quarters on the Phase 4 HRSA report. These costs were aggregated in total and then reported per each quarter based on an equal allocation, and should have been reported per each quarter based on the actual expenditure amount incurred in the respective quarter. Costs were determined to be allowable, reporting error only. The reporting for the quarters noted below were over/under stated by the following amounts due to this: Quarter 3(July - September 2021) Quarter 4(October - December 2021) Quarter 1(January - March 2022) Quarter 2 (April-June 2022) Quarter 3(July – September 2022) Quarter 4 (October-December 2022) Total Over (Under) stated $83,130 $850 $21,930 $(105,910) $29,227 $(29,227) $0 Cause The causes of the issues noted above were due to a lack of consistency in tracking and reviewing COVID-19 expenditures for inclusion in the Period 4 reporting across the organization. Effect University of Rochester and Related Entities’ Period 4 HRSA Reporting Portal submissions inaccurately captured total “Personnel” and “Fringe Benefits” for PRF expenses, and inaccurately captured total revenues which are utilized to report lost revenues for the period. Questioned Costs None noted. Recommendation We recommend (should there be future funding) management ensure that the organization-wide policy for reviewing HRSA Reporting portal submissions is implemented more consistently across entities. This will help ensure completeness and accuracy of future federal report and/or HRSA Reporting portal submissions. Additionally, we recommend management communicate the errors noted in the submissions to HRSA and request advice for how to correct this error.

2023-001: (A) (B) Unallowed COVID-19 expenditures reported within the Health Resources Services Administration (HRSA) Provider Relief Fund (PRF) Portal, Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Distribution, Assistance Listing Number: 93.498, Agency: Department of Health and Human Services (HHS), Award Year: 1/1/2020-6/30/2023, Award Number: Not available Criteria Law (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) notes that PRFs should be 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, these funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition The University of Rochester and Related Entities had 11 Period 4 submissions and 2 Period 5 submissions into the HRSA portal. Period 4 reporting was completed by the following entities: 1. University of Rochester, 2. UR Medicine Home Care, Certified Services, Inc., 3. St. James Hospital, 4. The Frederick Ferris Thompson Hospital, 5. MM Ewing Continuing Care Center, 6. Nicholas H. Noyes Memorial Hospital, 7. Memorial Hospital of William F and Gertrude F Jones Inc. 8. The Highlands Living Center Inc., 9. Highland Hospital of Rochester,10. Meadows at Westfall, Inc., and 11. FFT Senior Communities, Inc. Period 5 reporting was completed by the following entities: 1. UR Medicine Home Care, Certified Services, and 2. Highland Community Development Corp (d/b/a Highlands at Pittsford). From the detailed listing of expenses across the Period 4 HRSA submissions, we performed allowability testing of the “Unreimbursed Expenses Attributable to Coronavirus” in accordance with the Department of Health and Human Services (HHS) terms and conditions. The following table illustrates COVID-19 expenditures overstated (unallowable expenditure) in the Period 4 HRSA submissions by entity, by quarter and in total on a consolidated basis across the organization. Entities Other PRF Expenses Quarter 3 (July - September 2021) Quarter 4 (October - December 2021) Quarter 1 (January - March 2022) Total Overstated expenses UR Medicine Home Care Personnel 445 445 Nicholas H. Noyes Memorial Hospital Supplies 104,368 104,368 St. James Hospital Personnel 240 98,279 98,519 Total - Overstated expenses $ 240 $ 98,724 $ 104,368 $ 203,332 Cause The causes of the issues noted above were due to a lack of consistency in tracking and reviewing COVID-19 expenditures for inclusion in the Period 4 reporting across the organization. Effect University of Rochester and Related Entities’ Period 4 HRSA Reporting Portal submissions inaccurately captured total “Other PRF Expenses”. Questioned Costs UR Medicine Home Care had $445 of unallowable costs, however reported $1,362,892 million of unused lost revenues on the Phase 4 HRSA report. Nicholas H. Noyes Memorial Hospital had $104,368 of unallowable costs, however reported $1,818,103 of unused lost revenues on the Phase 4 HRSA report. St. James Hospital had $98,519 of unallowable costs, however reported lost revenue available to be used in the current reporting period was $203,524. As there were sufficient lost revenues for each entity, there are no questioned costs associated with this finding. Recommendation We recommend (should there be future funding) management ensure that the organization-wide policy for tracking and reviewing COVID-19 expenditures is implemented more consistently across entities. This will help ensure completeness and accuracy of future federal report and/or HRSA Reporting portal submissions. Additionally, we recommend management communicate the errors noted in the submissions to HRSA and request advice for how to correct this error.

2023-002: (L) Reporting of Unreimbursed Expenses Attributable to Coronavirus and Lost Revenues, within the Health Resources Services Administration (HRSA) Provider Relief Fund Portal, Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Distribution, Assistance Listing Number: 93.498, Agency: Department of Health and Human Services (HHS), Award Year: 1/1/2023-3/31/2023, Award Number: Not available Criteria Law (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) notes that PRFs should be 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, these funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition Through testing of Period 4 HRSA portal submissions, we identified the following: St James Hospital: • Personnel costs of $466,729 were all reported in quarter 3 of 2021 on the Phase 4 HRSA report. These costs related to incentive pay and were expensed from July 2021 through June 2022, and should have been allocated between Q3 2021 – Q2 2022 instead of all in Q3 2021. Costs were determined to be allowable, reporting error only. The reporting for the quarters noted below were over/under stated by the following amounts due to this: Quarter 3(July - September 2021) Quarter 4(October - December 2021) Quarter 1(January - March 2022) Quarter 2(April-June 2022) Total Over (Under) stated $376,523 $(184,184) $(108,609) $(83,730) $0 • Lost revenue calculation inaccurately overstated actual 2021 revenues as management did not include actual revenue net of bad debt expense in the quarterly totals for calendar year 2021. The Phase 4 HRSA report included no eligible lost revenue for 2021, and using the corrected amount of revenue net of bad debt expense does not change this conclusion. The report was corrected to properly state actual 2021 revenue. Memorial Hospital of William F and Gertrude F Jones Inc.: • Supply costs related to COVID-19 tests were reported on an equal allocation across quarters verses in actual amounts across quarters on the Phase 4 HRSA report. These costs were aggregated in total and then reported per each quarter based on an equal allocation, and should have been reported per each quarter based on the actual expenditure amount incurred in the respective quarter. Costs were determined to be allowable, reporting error only. The reporting for the quarters noted below were over/under stated by the following amounts due to this: Quarter 3(July - September 2021) Quarter 4(October - December 2021) Quarter 1(January - March 2022) Quarter 2 (April-June 2022) Quarter 3(July – September 2022) Quarter 4 (October-December 2022) Total Over (Under) stated $83,130 $850 $21,930 $(105,910) $29,227 $(29,227) $0 Cause The causes of the issues noted above were due to a lack of consistency in tracking and reviewing COVID-19 expenditures for inclusion in the Period 4 reporting across the organization. Effect University of Rochester and Related Entities’ Period 4 HRSA Reporting Portal submissions inaccurately captured total “Personnel” and “Fringe Benefits” for PRF expenses, and inaccurately captured total revenues which are utilized to report lost revenues for the period. Questioned Costs None noted. Recommendation We recommend (should there be future funding) management ensure that the organization-wide policy for reviewing HRSA Reporting portal submissions is implemented more consistently across entities. This will help ensure completeness and accuracy of future federal report and/or HRSA Reporting portal submissions. Additionally, we recommend management communicate the errors noted in the submissions to HRSA and request advice for how to correct this error.