FAC Explorer

Audit 30226

FY End
2022-09-30
Total Expended
$9.18M
Findings
4
Programs
4
Organization: Ector County Hospital District D/b/a Medical Center Health System (TX)
Year: 2022 Accepted: 2023-06-27
Auditor: Forvis LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
38254 2022-001 Material Weakness - AB
38255 2022-002 Significant Deficiency - L
614696 2022-001 Material Weakness - AB
614697 2022-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $3.00M Yes 1
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $2.66M Yes 1
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $2.63M Yes 0
93.527 Grants for New and Expanded Services Under the Health Center Program $888,489 Yes 0

Contacts

Name Title Type
LPF4ESK8FSN1 Grant Trollope Auditee
4326402051 Danielle Zimmerman Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such 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. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Ector County Hospital District d/b/a Medical Center Health System (District) under programs of the federal government for the year ended September 30, 2022. 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 District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District.The schedule includes the expenditures of the following entities:1.)Ector County Hospital District d/b/a Medical Center Health System (TIN 75-2302928)2.)MCH Professional d/b/a MCH ProCare Clinic Based (TIN 92-0192097)3.)MCH Professional Care Hospital Based (TIN 45-2654166)
Title: Federal Loan Program Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such 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. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal loan program listed subsequently is administered directly by the District, and balances and transactions relating to this program is included in the Districts basic financial statements. There were no loans outstanding at the beginning of the year, and the loan made during the year is included in the federal expenditures presented in the Schedule. The balance of the loan outstanding at September 30, 2022, consists of: Assistance Listing NumberProgram NameOutstanding Balance at September 30, 202221.027COVID-19 Coronavirus State and Local Fiscal Recovery Fund$3,000,000
Title: Personal Protective Equipment (PPE) (Unaudited) Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such 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. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. For the year ended September 30, 2022, the District received $0 in donated personal protective equipment in response to the COVID-19 pandemic.

Finding Details

Finding 2022-001
COVID-19 Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number 21.027 U.S. Department of Treasury Pass-Through Entity - City of Odessa, TX Criteria ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). Condition ? The District reported COVID-19-related expenditures within the COVID-19 Coronavirus State and Local Fiscal Recovery Fund that were reimbursed via other sources. Questioned costs ? $762,548 ? Questioned costs were calculated as the value of the payroll costs charged to the COVID-19 Coronavirus State and Local Fiscal Recovery Fund that were also included on the Period 1 and 2 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution reports. Context ? The expenditure detail submitted to the City of Odessa for grant reporting purposes was tested. The District utilized payroll costs associated with their COVID-19 departments as a component of their reported expenditures. When reviewing the dates and department codes of the payroll costs submitted, expenditures were identified that were also included on expenditure details utilized for the Period 1 and 2 PRF reports. Effect ? The District submitted expenses to the City of Odessa that were reimbursed from PRF. Cause ? Internal controls were not in place to ensure the District did not submit expenses to multiple sources. The District did not exclude previously reimbursed expenditures in their reporting. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reported expenditures are not double dipped. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the District?s response to finding.
Finding 2022-002
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or specific requirement ? Reporting (45 CFR 75.342) Condition ? The District is required to prepare and submit Provider Relief Fund reports. The reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned costs ? N/A Context ? The Period 2 Provider Relief Fund report was submitted and included a lost revenue calculation under option 1, which compared 2020 and 2021 revenue to 2019 revenue. Under option 1, quarterly revenues were required to be reported by payor class. The District incorrectly allocated quarterly revenue by payor class based on an inaccurate allocation of deductions to gross revenue by payor amounts. Effect ? The District did not properly report lost revenues by financial class. Cause ? Internal controls were not in place to ensure the District prepared the Period 2 provider Relief Fund report for the allocation of net patient service revenue by financial class. The District did not appropriately report revenue by payor class. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the District?s response to finding.
Finding 2022-001
COVID-19 Coronavirus State and Local Fiscal Recovery Fund Assistance Listing Number 21.027 U.S. Department of Treasury Pass-Through Entity - City of Odessa, TX Criteria ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). Condition ? The District reported COVID-19-related expenditures within the COVID-19 Coronavirus State and Local Fiscal Recovery Fund that were reimbursed via other sources. Questioned costs ? $762,548 ? Questioned costs were calculated as the value of the payroll costs charged to the COVID-19 Coronavirus State and Local Fiscal Recovery Fund that were also included on the Period 1 and 2 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution reports. Context ? The expenditure detail submitted to the City of Odessa for grant reporting purposes was tested. The District utilized payroll costs associated with their COVID-19 departments as a component of their reported expenditures. When reviewing the dates and department codes of the payroll costs submitted, expenditures were identified that were also included on expenditure details utilized for the Period 1 and 2 PRF reports. Effect ? The District submitted expenses to the City of Odessa that were reimbursed from PRF. Cause ? Internal controls were not in place to ensure the District did not submit expenses to multiple sources. The District did not exclude previously reimbursed expenditures in their reporting. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reported expenditures are not double dipped. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the District?s response to finding.
Finding 2022-002
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or specific requirement ? Reporting (45 CFR 75.342) Condition ? The District is required to prepare and submit Provider Relief Fund reports. The reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned costs ? N/A Context ? The Period 2 Provider Relief Fund report was submitted and included a lost revenue calculation under option 1, which compared 2020 and 2021 revenue to 2019 revenue. Under option 1, quarterly revenues were required to be reported by payor class. The District incorrectly allocated quarterly revenue by payor class based on an inaccurate allocation of deductions to gross revenue by payor amounts. Effect ? The District did not properly report lost revenues by financial class. Cause ? Internal controls were not in place to ensure the District prepared the Period 2 provider Relief Fund report for the allocation of net patient service revenue by financial class. The District did not appropriately report revenue by payor class. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the District?s response to finding.