FAC Explorer

Audit 302859

FY End
2021-09-30
Total Expended
$11.96M
Findings
6
Programs
4
Organization: The Jackson County Health Care Authority (AL)
Year: 2021 Accepted: 2024-04-08
Auditor: Forvis LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392584 2021-002 Material Weakness - L
392585 2021-003 Material Weakness - BL
392586 2021-004 Material Weakness - BL
969026 2021-002 Material Weakness - L
969027 2021-003 Material Weakness - BL
969028 2021-004 Material Weakness - BL

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $10.65M Yes 2
21.019 Coronavirus Relief Fund $804,000 Yes 1
93.461 Covid-19 Testing for the Uninsured $421,422 Yes 0
93.301 Small Rural Hospital Improvement Grant Program $83,317 - 0

Contacts

Name Title Type
JGJLRU1LKFG1 John Carrier Auditee
2562183680 Kelly Thrift Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance . The accompanying schedule of expenditures of federal awards (SEFA) includes the federal award activity of The Jackson County Health Care Authority (the Authority) for the year ended September 30, 2021. The information in this SEFA is presented in accordance with the requirements of Title 2 US Code of Federal Regulations Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly and indirectly from federal agencies are included in the accompanying SEFA. Because the SEFA presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Authority.
Title: Basis of Accounting Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance . Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. As outlined in the OMB Compliance Supplement, the amounts reported in the accompanying SEFA related to the Provider Relief Fund (PRF), CFDA No. 93.498, are reported based upon the PRF reporting portal submission guidelines established by the Health Resource and Service Administration (HRSA). Separate reporting periods were established by HRSA based on the dates of receipt of PRF payments. Each reporting period has a specific period of availability which begins on January 1, 2020 and extends through specified deadlines, as indicated below: The accompanying SEFA includes those qualifying expenditures and lost revenues that were reported in the HRSA PRF portal for Period 1. The Authority recognized PRF payments during the fiscal years ended September 30, 2021 and 2020, $7,608,071 and $3,040,631, respectively. Lost revenues are reported based on the HRSA Option 1 reporting of lost revenues by comparing actual revenues by quarter during the period of availability to the prior period actual amounts for similar quarters. Expenditures and lost revenues for PRF are based upon the PRF report for the PRF reporting period ending September 30, 2021. The Authority has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Authority did not pass through any funds to subrecipients and there were not any loan programs.

Finding Details

Finding 2021-002
Finding 2021-002 Material Weakness and Material Noncompliance over Reporting Department of Health and Human Services COVID-19 Provider Relief Funds Assistance Listing 93.498 Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF). The use of the PRF distributions is required to be reported to the Department of Health and Human Services by recipients through the PRF reporting portal by and by nature and/or function. Management should have effectively designed controls in place to prevent, or detect and correct, material noncompliance with the reporting requirements of PRF. Condition: Management submitted expenses through the Department of Health and Human Services PRF reporting portal that did not reconcile to the underlying expense details by nature and/or function as provided by management, and therefore did not comply with PRF reporting requirements. Management’s process for reporting through the PRF portal lacked effective controls to prevent, or detect and correct, such reporting noncompliance on a timely basis. Questioned Costs: N/A Context: For PRF reporting period 1, which include periods of availability that ended during the Authority’s fiscal year ended September 30, 2021, management reported through the PRF reporting portal payroll expenses totaling $1,720,114, non-payroll expenses totaling $4,164,457 and lost revenue of $4,764,131. The results of audit procedures determined that the expenses were misclassified between categories as there were actually $1,676,415 in payroll expenses and $4,208,156 in non-payroll expenses included in the respective populations. Effect: Inaccurate information was reported through the Department of Health and Human Services PRF reporting portal with respect to classification of expenses by nature and/or function, resulting in material noncompliance with PRF reporting requirements. Cause: Effective controls were not designed and implemented sufficient to prevent, or detect and correct, inaccurate reporting and classification of coronavirus-related expenses by nature and/or function to the Department of Health and Human Services through the PRF reporting portal. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance should be implemented to ensure the classification of allowable costs reported to the Department of Health and Human Services through the PRF reporting portal is accurate with respect to nature and/or function, and in compliance with PRF reporting requirements. Views of responsible officials: Management agrees with the findings and will implement controls to ensure future PRF reporting compliance. See management’s Corrective Action Plan.
Finding 2021-003
Finding 2021-003 – Noncompliance with Allowable Costs and Reporting Material Noncompliance and Material Weakness Department of Health and Human Services COVID-19 Provider Relief Funds Assistance Listing 93.498 Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF). Those terms and conditions outlined the usages of the PRF distributions received, specifically related to expenses. PRF distributions should only be used to prevent, prepare for, and respond to the coronavirus that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management should have effectively designed controls to review, approve, prevent, or detect and correct, material noncompliance with major federal programs. Condition: The Authority submitted expenses through the Department of Health and Human Services PRF portal for the first period of availability that did not meet the criteria of allowable expenditures in accordance with the terms and conditions and lacked related controls over compliance with major federal programs. Context and Questioned Costs: A sample of 60 payroll expenditures and 60 non-payroll expenditures were selected. The sample of 60 identified $85,288 of questioned costs in the sample population to not be in compliance. The sample of 60 non-payroll expenditures were tested and 34 sample selections identified $1,164,098 of questioned costs in the non-payroll population to not be in compliance. The sample was not and was not intended to be statistically valid. Effect: The Authority overstated the expenses submitted through the Department of Health and Human Services PRF portal for the period of availability, resulting in material noncompliance. Cause: A control was not in place to review, approve, prevent, or detect and correct, ineligible expenditures from being identified and reported as qualifying expenditures for the Provider Relief Funds. Qualifying expenditures should have been determined based on the terms and conditions associated with the PRF. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure payroll and non-payroll expenses are accumulated in accordance with the terms and conditions prior to claiming such expenditures as being allowable and being submitted through the Department of Health and Human Services PRF portal. Views of responsible officials: Management agrees with the findings and has put in to place a process to review all qualifying expenses monthly moving forward. See Management’s Corrective Action Plan.
Finding 2021-004
Finding 2021-004 – Noncompliance with Allowable Costs and Reporting Material Noncompliance and Material Weakness Department of the Treasury passed through the Alabama Department of Finance COVID-19 Coronavirus Relief Fund Assistance Listing 21.019 Criteria: The Department of Department of the Treasury provided terms and conditions associated with the Coronavirus Relief Fund (CRF). Those terms and conditions outlined the usages of the CRF distributions received, specifically related to expenses. CRF distributions should only be used to prevent, prepare for, and respond to the coronavirus that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management should have effectively designed controls to review, approve, prevent, or detect and correct, material noncompliance with major federal programs. Condition: The Authority submitted expenses to the Alabama Department of Finance that did not meet the criteria of allowable expenditures in accordance with the terms and conditions and lacked related controls over compliance with major federal programs. Context and Questioned Costs: A sample of 8 payroll expenditures and 17 non-payroll expenditures were selected and tested. The sample of 8 payroll expenditures were tested and identified $6,566 of questioned cost expenditures in the population to not be in compliance. The sample of 17 non-payroll expenditures were tested and identified $304,854 of questioned cost expenditures in the non-payroll population to not be in compliance. The sample was not and was not intended to be statistically valid. Effect: The Authority overstated the expenses submitted through the Alabama Department of Finance for the period of availability, resulting in material noncompliance. Cause: A control was not in place to review, approve, prevent, or detect and correct, ineligible expenditures from being identified and reported as qualifying expenditures for the Coronavirus Relief Funds. Qualifying expenditures should have been determined based on the terms and conditions associated with the CRF. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure payroll and non-payroll expenses are accumulated in accordance with the terms and conditions prior to claiming such expenditures as being allowable and being submitted to the Department of the Treasury. Views of responsible officials: Management agrees with the findings and has put in to place a process to review all qualifying expenses monthly moving forward. See Management’s Corrective Action Plan.
Finding 2021-002
Finding 2021-002 Material Weakness and Material Noncompliance over Reporting Department of Health and Human Services COVID-19 Provider Relief Funds Assistance Listing 93.498 Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF). The use of the PRF distributions is required to be reported to the Department of Health and Human Services by recipients through the PRF reporting portal by and by nature and/or function. Management should have effectively designed controls in place to prevent, or detect and correct, material noncompliance with the reporting requirements of PRF. Condition: Management submitted expenses through the Department of Health and Human Services PRF reporting portal that did not reconcile to the underlying expense details by nature and/or function as provided by management, and therefore did not comply with PRF reporting requirements. Management’s process for reporting through the PRF portal lacked effective controls to prevent, or detect and correct, such reporting noncompliance on a timely basis. Questioned Costs: N/A Context: For PRF reporting period 1, which include periods of availability that ended during the Authority’s fiscal year ended September 30, 2021, management reported through the PRF reporting portal payroll expenses totaling $1,720,114, non-payroll expenses totaling $4,164,457 and lost revenue of $4,764,131. The results of audit procedures determined that the expenses were misclassified between categories as there were actually $1,676,415 in payroll expenses and $4,208,156 in non-payroll expenses included in the respective populations. Effect: Inaccurate information was reported through the Department of Health and Human Services PRF reporting portal with respect to classification of expenses by nature and/or function, resulting in material noncompliance with PRF reporting requirements. Cause: Effective controls were not designed and implemented sufficient to prevent, or detect and correct, inaccurate reporting and classification of coronavirus-related expenses by nature and/or function to the Department of Health and Human Services through the PRF reporting portal. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance should be implemented to ensure the classification of allowable costs reported to the Department of Health and Human Services through the PRF reporting portal is accurate with respect to nature and/or function, and in compliance with PRF reporting requirements. Views of responsible officials: Management agrees with the findings and will implement controls to ensure future PRF reporting compliance. See management’s Corrective Action Plan.
Finding 2021-003
Finding 2021-003 – Noncompliance with Allowable Costs and Reporting Material Noncompliance and Material Weakness Department of Health and Human Services COVID-19 Provider Relief Funds Assistance Listing 93.498 Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF). Those terms and conditions outlined the usages of the PRF distributions received, specifically related to expenses. PRF distributions should only be used to prevent, prepare for, and respond to the coronavirus that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management should have effectively designed controls to review, approve, prevent, or detect and correct, material noncompliance with major federal programs. Condition: The Authority submitted expenses through the Department of Health and Human Services PRF portal for the first period of availability that did not meet the criteria of allowable expenditures in accordance with the terms and conditions and lacked related controls over compliance with major federal programs. Context and Questioned Costs: A sample of 60 payroll expenditures and 60 non-payroll expenditures were selected. The sample of 60 identified $85,288 of questioned costs in the sample population to not be in compliance. The sample of 60 non-payroll expenditures were tested and 34 sample selections identified $1,164,098 of questioned costs in the non-payroll population to not be in compliance. The sample was not and was not intended to be statistically valid. Effect: The Authority overstated the expenses submitted through the Department of Health and Human Services PRF portal for the period of availability, resulting in material noncompliance. Cause: A control was not in place to review, approve, prevent, or detect and correct, ineligible expenditures from being identified and reported as qualifying expenditures for the Provider Relief Funds. Qualifying expenditures should have been determined based on the terms and conditions associated with the PRF. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure payroll and non-payroll expenses are accumulated in accordance with the terms and conditions prior to claiming such expenditures as being allowable and being submitted through the Department of Health and Human Services PRF portal. Views of responsible officials: Management agrees with the findings and has put in to place a process to review all qualifying expenses monthly moving forward. See Management’s Corrective Action Plan.
Finding 2021-004
Finding 2021-004 – Noncompliance with Allowable Costs and Reporting Material Noncompliance and Material Weakness Department of the Treasury passed through the Alabama Department of Finance COVID-19 Coronavirus Relief Fund Assistance Listing 21.019 Criteria: The Department of Department of the Treasury provided terms and conditions associated with the Coronavirus Relief Fund (CRF). Those terms and conditions outlined the usages of the CRF distributions received, specifically related to expenses. CRF distributions should only be used to prevent, prepare for, and respond to the coronavirus that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management should have effectively designed controls to review, approve, prevent, or detect and correct, material noncompliance with major federal programs. Condition: The Authority submitted expenses to the Alabama Department of Finance that did not meet the criteria of allowable expenditures in accordance with the terms and conditions and lacked related controls over compliance with major federal programs. Context and Questioned Costs: A sample of 8 payroll expenditures and 17 non-payroll expenditures were selected and tested. The sample of 8 payroll expenditures were tested and identified $6,566 of questioned cost expenditures in the population to not be in compliance. The sample of 17 non-payroll expenditures were tested and identified $304,854 of questioned cost expenditures in the non-payroll population to not be in compliance. The sample was not and was not intended to be statistically valid. Effect: The Authority overstated the expenses submitted through the Alabama Department of Finance for the period of availability, resulting in material noncompliance. Cause: A control was not in place to review, approve, prevent, or detect and correct, ineligible expenditures from being identified and reported as qualifying expenditures for the Coronavirus Relief Funds. Qualifying expenditures should have been determined based on the terms and conditions associated with the CRF. Identification of Prior Year Audit Findings: N/A Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure payroll and non-payroll expenses are accumulated in accordance with the terms and conditions prior to claiming such expenditures as being allowable and being submitted to the Department of the Treasury. Views of responsible officials: Management agrees with the findings and has put in to place a process to review all qualifying expenses monthly moving forward. See Management’s Corrective Action Plan.