FAC Explorer

Audit 302715

FY End
2021-06-30
Total Expended
$4.42M
Findings
6
Programs
3
Organization: Scott County Hospital (KS)
Year: 2021 Accepted: 2024-04-05
Auditor: Gbn P A

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392366 2021-001 Significant Deficiency - L
392367 2021-002 Material Weakness - B
392368 2021-003 Significant Deficiency - L
968808 2021-001 Significant Deficiency - L
968809 2021-002 Material Weakness - B
968810 2021-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $4.33M Yes 3
93.697 Covid-19 Testing for Rural Health Clinics $49,461 - 0
93.301 Small Rural Hospital Improvement Grant Program $35,666 - 0

Contacts

Name Title Type
RBKPT8KE9FX9 James Forrest Auditee
6208727777 Paul Bowerman Auditor
No contacts on file

Notes to SEFA

Title: Note A: Basis of Presentation Accounting Policies: The SEFA was prepared on the accrual basis of accounting De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate The schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Hospital under programs of the federal government for the year ended June 30, 2021. 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 position, or cash flows of the Hospital.
Title: Note B : Summary of Significant Accounting Policies Accounting Policies: The SEFA was prepared on the accrual basis of accounting De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate Expenditures on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. Pass, through entity identifying numbers are presented where available.
Title: Note C : Indirect Cost Rate Accounting Policies: The SEFA was prepared on the accrual basis of accounting De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate The Hospital has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Finding Details

Finding 2021-001
Identification: 93.498 United States Department of Health and Human Services, COVID-19 Provider Relief Fund; Noncompliance Finding/Significant Deficiency; Reporting Compliance Requirement. Criteria: Lost Revenues (Public Law 116-136). Condition: The Hospital's calculation of lost revenues for the Period 1 submission did not exclude the actual patient care revenues associated with a new non-COVID related service. The new non-COVID related service was not included in the baseline period and therefore the revenue associated with the new non-COVID related service should have been excluded from the comparison period. Cause: The Hospital used total patient care revenues for the computation of lost revenues without adjustment for the new non-COVID related service. Effect: The Hospital understated the calculation of lost revenues by $236,546. Questioned costs: None Context/Perspective: The finding appears to be an isolated issue. Repeat Finding: N/A Recommendations: We recommend that the calculation of lost revenue exclude new non-COVID related patient care revenues to allow for consistent measurement of baseline and lost revenues. Views of Responsible Officials: The Hospital will correct the lost revenue calculations to exclude new non-COVID related patient care revenues in both the baseline and comparison periods in all subsequent PRF reporting.
Finding 2021-002
Identification: 93.498 United States Department of Health and Human Services, COVID-19 Provider Relief Fund; Noncompliance Finding/Material Weakness; Allowable Costs. Criteria: Allowable Costs (Public Law 116-136). Condition: Allowable costs related to the program are expenses or losses that were not reimbursed from other sources or that other sources were not obligated to reimburse. Cause: The Hospital did not reduce COVID-19 related costs claimed under the PRF program for costbased reimbursements received from the Medicare program for the COVID-19 related expense. Effect: The amount reported as COVID-19 related costs to the PRF program was overstated. Questioned costs: $539,318, as estimated at the applicable reimbursement percentage for Medicare. However, as noted in finding 2021-001, the Hospital understated lost revenues by $236,546 and together with the remaining expenditures and reported lost revenues, the Hospital had sufficient expenditures and lost revenues to support one hundred percent of the PRF grant funding received Context/Perspective: Allowable costs were not reduced for cost-based reimbursement from the Medicare program. Repeat Finding: N/A Recommendations: Refer to the HHS Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements and the most recently distributed Provider Relief Fund frequently asked questions, which provide details on requirements related to the program. Views of Responsible Officials: The Hospital will ensure the costs included in all subsequent Provider Relief Fund reporting is reduced for amounts reimbursed by other sources. 33
Finding 2021-003
Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund; Noncompliance Finding/Significant Deficiency; Reporting Compliance Requirement Criteria: Lost Revenues (Public Law 116-136). Condition: The Hospital selected option ii for reporting budgeted versus actual revenue for the computation of lost revenues for 2020 and the first two quarters on 2021. The Hospital's budget through June 2020 was approved by March 27, 2020 but the budget for July 2020 to June 2021 was approved subsequent to March 27, 2020. Accordingly, the Hospital should have selected option iii, a reasonable alternative methodology, when reporting lost revenue. Cause: The budget for July 2020 to June 2021 was approved subsequent to March 27, 2020. Effect: The Hospital reported lost revenues on the PRF portal under option ii instead of option iii. Questioned Costs: None. Context/Perspective: The option selected to report lost revenues was not accurate, however, the calculation of lost revenues was accurate and deemed to be a reasonable methodology. Repeat Finding: N/A Recommendations: We recommend that management review controls over federal grant reporting to ensure the proper reporting of lost revenues. Views of Responsible Officials: Management agrees with this finding and will review procedures to ensure that lost revenues are reported under method iii on future PRF report submissions.
Finding 2021-001
Identification: 93.498 United States Department of Health and Human Services, COVID-19 Provider Relief Fund; Noncompliance Finding/Significant Deficiency; Reporting Compliance Requirement. Criteria: Lost Revenues (Public Law 116-136). Condition: The Hospital's calculation of lost revenues for the Period 1 submission did not exclude the actual patient care revenues associated with a new non-COVID related service. The new non-COVID related service was not included in the baseline period and therefore the revenue associated with the new non-COVID related service should have been excluded from the comparison period. Cause: The Hospital used total patient care revenues for the computation of lost revenues without adjustment for the new non-COVID related service. Effect: The Hospital understated the calculation of lost revenues by $236,546. Questioned costs: None Context/Perspective: The finding appears to be an isolated issue. Repeat Finding: N/A Recommendations: We recommend that the calculation of lost revenue exclude new non-COVID related patient care revenues to allow for consistent measurement of baseline and lost revenues. Views of Responsible Officials: The Hospital will correct the lost revenue calculations to exclude new non-COVID related patient care revenues in both the baseline and comparison periods in all subsequent PRF reporting.
Finding 2021-002
Identification: 93.498 United States Department of Health and Human Services, COVID-19 Provider Relief Fund; Noncompliance Finding/Material Weakness; Allowable Costs. Criteria: Allowable Costs (Public Law 116-136). Condition: Allowable costs related to the program are expenses or losses that were not reimbursed from other sources or that other sources were not obligated to reimburse. Cause: The Hospital did not reduce COVID-19 related costs claimed under the PRF program for costbased reimbursements received from the Medicare program for the COVID-19 related expense. Effect: The amount reported as COVID-19 related costs to the PRF program was overstated. Questioned costs: $539,318, as estimated at the applicable reimbursement percentage for Medicare. However, as noted in finding 2021-001, the Hospital understated lost revenues by $236,546 and together with the remaining expenditures and reported lost revenues, the Hospital had sufficient expenditures and lost revenues to support one hundred percent of the PRF grant funding received Context/Perspective: Allowable costs were not reduced for cost-based reimbursement from the Medicare program. Repeat Finding: N/A Recommendations: Refer to the HHS Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements and the most recently distributed Provider Relief Fund frequently asked questions, which provide details on requirements related to the program. Views of Responsible Officials: The Hospital will ensure the costs included in all subsequent Provider Relief Fund reporting is reduced for amounts reimbursed by other sources. 33
Finding 2021-003
Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund; Noncompliance Finding/Significant Deficiency; Reporting Compliance Requirement Criteria: Lost Revenues (Public Law 116-136). Condition: The Hospital selected option ii for reporting budgeted versus actual revenue for the computation of lost revenues for 2020 and the first two quarters on 2021. The Hospital's budget through June 2020 was approved by March 27, 2020 but the budget for July 2020 to June 2021 was approved subsequent to March 27, 2020. Accordingly, the Hospital should have selected option iii, a reasonable alternative methodology, when reporting lost revenue. Cause: The budget for July 2020 to June 2021 was approved subsequent to March 27, 2020. Effect: The Hospital reported lost revenues on the PRF portal under option ii instead of option iii. Questioned Costs: None. Context/Perspective: The option selected to report lost revenues was not accurate, however, the calculation of lost revenues was accurate and deemed to be a reasonable methodology. Repeat Finding: N/A Recommendations: We recommend that management review controls over federal grant reporting to ensure the proper reporting of lost revenues. Views of Responsible Officials: Management agrees with this finding and will review procedures to ensure that lost revenues are reported under method iii on future PRF report submissions.