Audit 302889

FY End
2021-09-30
Total Expended
$24.51M
Findings
4
Programs
2
Year: 2021 Accepted: 2024-04-08
Auditor: Forvis LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
392595 2021-001 Significant Deficiency - B
392596 2021-002 Material Weakness - B
969037 2021-001 Significant Deficiency - B
969038 2021-002 Material Weakness - B

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $21.83M Yes 2
93.461 Covid-19 Testing for the Uninsured $2.68M Yes 0

Contacts

Name Title Type
UFJRDZQQXTX4 Tim Evans Auditee
8647254248 Mike Kelly 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 Hospital 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 Self Regional Healthcare and Affiliates (the “Hospital”) under the programs of the federal government for the year ended September 30, 2021. The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. 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 this SEFA. Because the SEFA 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: 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 Hospital 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 July 2021 OMB Compliance Supplement, the amounts reported in the accompanying SEFA related to the Provider Relief Fund (“PRF”), Assistance Listing No. 93.498, are reported based upon the PRF reporting portal submission guidelines established by the Health Resource and Service Administration (“HRSA”). Four 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 lost revenues and expenses that were reported in the HRSA PRF portal for Period 1. The total amount of $21,833,750 in PRF payments was recognized by the Hospital as nonoperating revenues totaling $8,766,845 and $13,066,905 during the fiscal years ended September 30, 2021 and 2020, respectively. The Hospital has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Contingencies 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 Hospital has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Hospital’s federal programs are subject to financial and compliance audits by grantor agencies which, if instances of material noncompliance are found, may result in disallowed expenditures and affect the Hospital’s continued participation in specific programs. The amount if any, of expenditures which may be disallowed by the grantor agencies cannot be determined at this time, although the Hospital expects such amounts, if any, to be immaterial.
Title: Categorization of Expenditures 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 Hospital has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The categorization of expenditures by program included in the SEFA is based upon the grant documents. Changes in the categorization of expenditures occur based upon revisions to the Assistance Listing, which is issued in June and December of each year. The SEFA for the year ended September 30, 2021 reflects Assistance Listing changes issued through July 2021 and the addendums dated December 2021 and January 2022.

Finding Details

Significant Deficiency 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 in place to prevent, or to detect and correct, noncompliance and related financial reporting misstatements. Condition: The Hospital internal control over Provider Relief Fund and American Rescue Plan (“ARP”) Rural Distributions resulted in ineligible costs reported on the Department of Health and Human Services PRF portal submission. Questioned Costs: $104,407 Effect: The Hospital overstated healthcare related expenses submitted through the Department of Health and Human Services PRF portal for the first period of availability by including ineligible expenses. Cause: Lack of effectively implemented controls, including oversight and detail review of expenditures submitted through the Department of Health and Human Services PRF portal for the first period of availability. Auditor’s Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure expenditures submitted through the Department of Health and Human Services PRF portal meet the criteria established in the terms and conditions. Management Response: See corrective action plan.
Material Weakness Assistance Listing 93.498 Criteria: The Hospital must have proper review controls in place and proper support of the review maintained for federal expenditures to determine proper allowable costs for qualifying expenditures and proper review of those costs per the terms and conditions applicable to Provider Relief Funds. Condition: Management could not support the review of certain healthcare expenditures utilized to recognize Provider Relief Funding. The Hospital claimed approximately $1.7 million in healthcare expenditures for the Schedule of Expenditures of Federal Awards reporting period for the year-ended September 30, 2021. Questioned Costs: $0 Effect: The failure to be able to support the review of COVID-19 healthcare expenditures could result in the improper determination of qualifying expenditures per the terms and conditions claimed as Provider Relief Fund expenditures. Cause: The Hospital did not have proper control procedures in place to retain the appropriate support for the controls related to Provider Relief Fund expenditures. Auditor’s Recommendation: We recommend management enhance its internal control procedures to ensure the retention of review documentation is maintained in order to support the review of the allowable costs. This will help ensure allowable costs are in accordance with the terms and conditions prior to claiming such expenditures as being allowable and reported on the portal. Management Response: See corrective action plan.
Significant Deficiency 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 in place to prevent, or to detect and correct, noncompliance and related financial reporting misstatements. Condition: The Hospital internal control over Provider Relief Fund and American Rescue Plan (“ARP”) Rural Distributions resulted in ineligible costs reported on the Department of Health and Human Services PRF portal submission. Questioned Costs: $104,407 Effect: The Hospital overstated healthcare related expenses submitted through the Department of Health and Human Services PRF portal for the first period of availability by including ineligible expenses. Cause: Lack of effectively implemented controls, including oversight and detail review of expenditures submitted through the Department of Health and Human Services PRF portal for the first period of availability. Auditor’s Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure expenditures submitted through the Department of Health and Human Services PRF portal meet the criteria established in the terms and conditions. Management Response: See corrective action plan.
Material Weakness Assistance Listing 93.498 Criteria: The Hospital must have proper review controls in place and proper support of the review maintained for federal expenditures to determine proper allowable costs for qualifying expenditures and proper review of those costs per the terms and conditions applicable to Provider Relief Funds. Condition: Management could not support the review of certain healthcare expenditures utilized to recognize Provider Relief Funding. The Hospital claimed approximately $1.7 million in healthcare expenditures for the Schedule of Expenditures of Federal Awards reporting period for the year-ended September 30, 2021. Questioned Costs: $0 Effect: The failure to be able to support the review of COVID-19 healthcare expenditures could result in the improper determination of qualifying expenditures per the terms and conditions claimed as Provider Relief Fund expenditures. Cause: The Hospital did not have proper control procedures in place to retain the appropriate support for the controls related to Provider Relief Fund expenditures. Auditor’s Recommendation: We recommend management enhance its internal control procedures to ensure the retention of review documentation is maintained in order to support the review of the allowable costs. This will help ensure allowable costs are in accordance with the terms and conditions prior to claiming such expenditures as being allowable and reported on the portal. Management Response: See corrective action plan.