FAC Explorer

Audit 304036

FY End
2021-12-31
Total Expended
$2.23M
Findings
8
Programs
3
Organization: Hospital Comunitario Buen Samaritano, Inc. (PR)
Year: 2021 Accepted: 2024-04-19
Auditor: Galindez LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
393842 2023-001 Significant Deficiency Yes A
393843 2023-002 Significant Deficiency Yes L
393844 2023-002 Significant Deficiency Yes L
393845 2023-003 Significant Deficiency - A
970284 2023-001 Significant Deficiency Yes A
970285 2023-002 Significant Deficiency Yes L
970286 2023-002 Significant Deficiency Yes L
970287 2023-003 Significant Deficiency - A

Programs

ALN Program Spent Major Findings
21.019 Coronavirus Relief Fund $854,582 Yes 2
21.027 Coronavirus State and Local Fiscal Recovery Funds $702,000 Yes 2
93.498 Provider Relief Fund $670,802 - 0

Contacts

Name Title Type
Q1WEJ6M7N2R9 José Gratacós Auditee
7876580000 Henry Flores Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: n/a The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Hospital Comunitario Buen Samaritano, Inc. (the Hospital), under programs of the federal government for the year ended December 31, 2021. The information included in the Schedule is prepared in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in or used in the preparation of the financial statements of the Hospital. 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, results of operations and cash flows of the Hospital. Funds received from the federal programs, as detailed in the Schedule, are included as grants revenue in the statement of operations and changes in net assets (accumulated deficit) for the years ended on December 31, 2021 and 2020 (See Note 5).
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: n/a a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note 3 - Assistance Listing Number (ALN) Accounting Policies: a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: n/a The Assistance Listing Numbers included in the Schedule are determined based on the program name, review of grant contract information and the OMB’s Assistance Listing.
Title: Note 4 - Major Federal Program Accounting Policies: a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: n/a The major federal programs are identified in the Summary of Auditors’ Results Section in the Schedule of Findings and Questioned Costs. The federal programs are presented by federal agency.
Title: Note 5 - Provider Relief Fund Accounting Policies: a. The Schedule is prepared from the Hospital’s accounting records and is not intended to present its financial position or the results of its operations. b. The financial transactions are recorded by the Hospital in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. d. Expenditures are reported on the Schedule following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be allowable or may be limited as to reimbursement. e. The Hospital has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: n/a During the year ended December 31, 2021, the Hospital received grants under the Provider Relief Fund (PRF) amounting to $1,504,980. Accordingly, as of December 31, 2021, the Hospital had expended such funds under the PRF, however, such expenditures have been excluded from the Schedule, as required by the 2022 OMB Compliance Supplement issued in April 2022. During the year ended December 2020, the Hospital recorded revenue from PRF amounting to $670,802, which, as dictated by the PRF special reporting requirements, is included in the SEFA for the year ended December 31, 2021.

Finding Details

Finding 2023-001
Finding No. 2021-001 - Activities Allowed or Unallowed - Hazard Pay Eligibility Federal Program Assistance Listing Number 21.019 - Coronavirus Relief Fund Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria As stated in the Federal Register, Hazard Pay may be covered using payments from the Coronavirus Relief Fund (the Fund) if it is provided for performing hazardous duty or work involving physical hardship that, in each case, is related to COVID–19. This means that the payroll and benefits of an employee who is substantially dedicated to mitigating or responding to the COVID–19 public health emergency may generally be covered in full using payments from the Fund. Hazard Pay may only be covered to the extent it is directly related to COVID-19. In addition, per the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) guidelines, Hazard Pay is allowable only if it is related to duties to directly respond to COVID-19, independent of the category of employee, usually reserved for First Responders. The guidelines recommend the following model for Hazard Pay: a. First Responders: are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion and are employees performing substantial services within the emergency rooms and the COVID-19 intensive care units. b. Temporary COVID-19 triage areas that a hospital may have established in response to the pandemic. c. The Hazard Pay program suggests the following apportionment for First Responders and the hospital has the discretion to classify the employees within the risk categories stated below: i. Very High Risk: $1,250 each ii. High Risk: $1,000 each iii. Medium Risk: $900 each iv. Lower Risk: $800 each Condition During our audit procedures, we identified certain ineligible employees that were included as part of the Hazard Pay program incentive. Cause The original guidelines issued by the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) for the Hazard Pay program provided a general definition for qualifying employees and that the eligibility criteria could be determined based on the Occupational Safety and Health Administration (OSHA) guidelines. However, such original Hazard Pay program guidelines were subsequently clarified by AAFAF, providing more specific criteria and definitions for qualifying employees. Based on the general guidelines issued by AAFAF, the Hospital included certain employees that did not meet the Hazard Pay program criteria, since the Hospital did not consult with AAFAF about the eligibility of certain Not Substantially Dedicated employees, as defined in the Federal Register. Effect The condition above resulted in the inclusion of ineligible employees in the payment of the Hazard Pay incentive. Questioned Cost Question cost amounted to $6,200 which represents the payments made to ineligible employees. Context Of the 325 employees that received the Hazard Pay incentive, we identified 31 employees that worked on departments not directly related to COVID 19. Total ineligible Hazard Pay incentives paid amounted to $6,200, out of total incentives paid of $125,089. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-001. Recommendation The Hospital should continue to monitor and review guidelines for federal awards under the CARES Act to ensure it is up-to-date on the applicable requirements and changes therein. In addition, the Hospital should consider consulting with AAFAF when available guidance may be subject to interpretation or when new awards, if any, are received. We recommend the Hospital to revise the guidelines to include only the first responders employees to receive the hazard pay. The meaning of first responders are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-002
Federal Programs Assistance Listing Number 21.019 - Coronavirus Relief Fund Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury U.S. Department of Health and Human Services Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria 2 CFR 200.512 (a) (1) establishes that the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditors' report(s), or nine months after the end of the audit period. Condition The Hospital did not submit the required data collection form and reporting package within the required period of September 30, 2022 (9 months after the end of fiscal year). Cause This condition was caused by the fact that the financial statements, which are part of the reporting package, were not ready to be released by the required period of September 30, 2022 (9 months after the end of fiscal year). Effect Federal grantors were prevented from being informed on a timely basis of the current audit findings and results. Consequently, any action, further requirements or support from the federal grantor could not be executed on a timely basis or at all. Context No context for this finding since this is a single audit annual reporting requirement to submit the Data Collection Form and the Reporting Package to the Federal Audit Clearinghouse. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-002. Questioned costs None Recommendation We recommend to the Hospital to establish calendars to review submission of required annual reporting in order to ascertain that all team members are aware of due dates, including filing extensions. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-002
Federal Programs Assistance Listing Number 21.019 - Coronavirus Relief Fund Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury U.S. Department of Health and Human Services Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria 2 CFR 200.512 (a) (1) establishes that the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditors' report(s), or nine months after the end of the audit period. Condition The Hospital did not submit the required data collection form and reporting package within the required period of September 30, 2022 (9 months after the end of fiscal year). Cause This condition was caused by the fact that the financial statements, which are part of the reporting package, were not ready to be released by the required period of September 30, 2022 (9 months after the end of fiscal year). Effect Federal grantors were prevented from being informed on a timely basis of the current audit findings and results. Consequently, any action, further requirements or support from the federal grantor could not be executed on a timely basis or at all. Context No context for this finding since this is a single audit annual reporting requirement to submit the Data Collection Form and the Reporting Package to the Federal Audit Clearinghouse. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-002. Questioned costs None Recommendation We recommend to the Hospital to establish calendars to review submission of required annual reporting in order to ascertain that all team members are aware of due dates, including filing extensions. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-003
Federal Programs Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria According to the 31 CFR Subtitle A Part 35 Subpart 35.6 (c)(1) A recipient may use funds to provide premium pay to eligible workers of the recipient who perform essential work or to provide grants to eligible employers that have eligible workers who perform essential work, eligible workers performing essential work during the COVID-19 public health emergency. A recipient uses premium pay or grants provided to eligible workers performing essential work during the COVID-19 public health emergency if: 1) The eligible worker's total wages and remuneration, including the premium pay, is less than or equal to 150 percent of the greater of such eligible worker's residing State's or county's average annual wage for all occupations as defined by the Bureau of Labor Statistics' Occupational Employment and Wage Statistics. Accordingly, the Puerto Rico Treasury Department created the "Comité de Supervisión de Desembolsos de los fondos del CRF". It established the guidelines under the ARPA Act and determined that an individual will be eligible if he was and employee of an Eligible Employer and meets the following requirements: a. The employee or worker has earned a base salary or annual compensation less than $40,000 for the calendar year 2020 or 2021; and b. When applying, the employee or worker is actively working for an Eligible Employer and has also completed at least five hundred (500) hours of essential work in person since March 1, 2020, carrying out essential work. Condition During our audit procedures on the expenses of the federal program, we found that one payment was made to an employee who did not meet the eligibility requirements. In addition, we identified a payment claimed to the federal program as being made to a specific employee, however, while performing audit procedures on the payment, we noted that the Hospital did not make the payment to the employee and did not return it to the grantor. Cause Involuntary error by an employee who worked with an eligible employee's report used to apply for the funds. The payroll department prepared the report with information from employees' records using specific program eligibility criteria. Then, the report was reviewed and approved by the finance department director. The employee for whom payment was not made resigned in August 2021 after the Hospital determined the eligible employees to be paid but before disbursement of payments. Premium pay funds were received by the Hospital on October 18, 2021 and considered the payment of the employee who resigned. The funds were disbursed to employees on October 29, 2021. Effect As a result of this condition, the U.S. Department of Treasury may request the return of funds, issue warnings and/or impose penalties to the Hospital. Questioned cost Question cost amounted to $4,000. The known questioned cost was calculated by the amount disbursed ($2,000) to the ineligible employee plus the payment not paid ($2,000) to the other employee. Context Of the three hundred fifty-one (351) premium pay payments made, we selected forty (40) payments for testing and noted one (1) instance of noncompliance. When we assessed the entire population, we extended the sample, selected ten (10) additional premium pay payments, and noted the exceptions of the payment not paid to an employee. Identification of a Repeat Finding This is not a repeat finding from the immediate previous audit. Recommendation The management of the Hospital should reinforce its procedures of the administration of federal funds to ensure the compliance with the requirements with each program. Also, the Hospital should establish communication with the Health Department of Puerto Rico in order to obtain instructions for the correction of the non-compliance event and the related questioned cost. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-001
Finding No. 2021-001 - Activities Allowed or Unallowed - Hazard Pay Eligibility Federal Program Assistance Listing Number 21.019 - Coronavirus Relief Fund Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria As stated in the Federal Register, Hazard Pay may be covered using payments from the Coronavirus Relief Fund (the Fund) if it is provided for performing hazardous duty or work involving physical hardship that, in each case, is related to COVID–19. This means that the payroll and benefits of an employee who is substantially dedicated to mitigating or responding to the COVID–19 public health emergency may generally be covered in full using payments from the Fund. Hazard Pay may only be covered to the extent it is directly related to COVID-19. In addition, per the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) guidelines, Hazard Pay is allowable only if it is related to duties to directly respond to COVID-19, independent of the category of employee, usually reserved for First Responders. The guidelines recommend the following model for Hazard Pay: a. First Responders: are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion and are employees performing substantial services within the emergency rooms and the COVID-19 intensive care units. b. Temporary COVID-19 triage areas that a hospital may have established in response to the pandemic. c. The Hazard Pay program suggests the following apportionment for First Responders and the hospital has the discretion to classify the employees within the risk categories stated below: i. Very High Risk: $1,250 each ii. High Risk: $1,000 each iii. Medium Risk: $900 each iv. Lower Risk: $800 each Condition During our audit procedures, we identified certain ineligible employees that were included as part of the Hazard Pay program incentive. Cause The original guidelines issued by the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) for the Hazard Pay program provided a general definition for qualifying employees and that the eligibility criteria could be determined based on the Occupational Safety and Health Administration (OSHA) guidelines. However, such original Hazard Pay program guidelines were subsequently clarified by AAFAF, providing more specific criteria and definitions for qualifying employees. Based on the general guidelines issued by AAFAF, the Hospital included certain employees that did not meet the Hazard Pay program criteria, since the Hospital did not consult with AAFAF about the eligibility of certain Not Substantially Dedicated employees, as defined in the Federal Register. Effect The condition above resulted in the inclusion of ineligible employees in the payment of the Hazard Pay incentive. Questioned Cost Question cost amounted to $6,200 which represents the payments made to ineligible employees. Context Of the 325 employees that received the Hazard Pay incentive, we identified 31 employees that worked on departments not directly related to COVID 19. Total ineligible Hazard Pay incentives paid amounted to $6,200, out of total incentives paid of $125,089. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-001. Recommendation The Hospital should continue to monitor and review guidelines for federal awards under the CARES Act to ensure it is up-to-date on the applicable requirements and changes therein. In addition, the Hospital should consider consulting with AAFAF when available guidance may be subject to interpretation or when new awards, if any, are received. We recommend the Hospital to revise the guidelines to include only the first responders employees to receive the hazard pay. The meaning of first responders are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-002
Federal Programs Assistance Listing Number 21.019 - Coronavirus Relief Fund Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury U.S. Department of Health and Human Services Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria 2 CFR 200.512 (a) (1) establishes that the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditors' report(s), or nine months after the end of the audit period. Condition The Hospital did not submit the required data collection form and reporting package within the required period of September 30, 2022 (9 months after the end of fiscal year). Cause This condition was caused by the fact that the financial statements, which are part of the reporting package, were not ready to be released by the required period of September 30, 2022 (9 months after the end of fiscal year). Effect Federal grantors were prevented from being informed on a timely basis of the current audit findings and results. Consequently, any action, further requirements or support from the federal grantor could not be executed on a timely basis or at all. Context No context for this finding since this is a single audit annual reporting requirement to submit the Data Collection Form and the Reporting Package to the Federal Audit Clearinghouse. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-002. Questioned costs None Recommendation We recommend to the Hospital to establish calendars to review submission of required annual reporting in order to ascertain that all team members are aware of due dates, including filing extensions. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-002
Federal Programs Assistance Listing Number 21.019 - Coronavirus Relief Fund Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury U.S. Department of Health and Human Services Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria 2 CFR 200.512 (a) (1) establishes that the audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditors' report(s), or nine months after the end of the audit period. Condition The Hospital did not submit the required data collection form and reporting package within the required period of September 30, 2022 (9 months after the end of fiscal year). Cause This condition was caused by the fact that the financial statements, which are part of the reporting package, were not ready to be released by the required period of September 30, 2022 (9 months after the end of fiscal year). Effect Federal grantors were prevented from being informed on a timely basis of the current audit findings and results. Consequently, any action, further requirements or support from the federal grantor could not be executed on a timely basis or at all. Context No context for this finding since this is a single audit annual reporting requirement to submit the Data Collection Form and the Reporting Package to the Federal Audit Clearinghouse. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-002. Questioned costs None Recommendation We recommend to the Hospital to establish calendars to review submission of required annual reporting in order to ascertain that all team members are aware of due dates, including filing extensions. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.
Finding 2023-003
Federal Programs Assistance Listing Number 21.027 - Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria According to the 31 CFR Subtitle A Part 35 Subpart 35.6 (c)(1) A recipient may use funds to provide premium pay to eligible workers of the recipient who perform essential work or to provide grants to eligible employers that have eligible workers who perform essential work, eligible workers performing essential work during the COVID-19 public health emergency. A recipient uses premium pay or grants provided to eligible workers performing essential work during the COVID-19 public health emergency if: 1) The eligible worker's total wages and remuneration, including the premium pay, is less than or equal to 150 percent of the greater of such eligible worker's residing State's or county's average annual wage for all occupations as defined by the Bureau of Labor Statistics' Occupational Employment and Wage Statistics. Accordingly, the Puerto Rico Treasury Department created the "Comité de Supervisión de Desembolsos de los fondos del CRF". It established the guidelines under the ARPA Act and determined that an individual will be eligible if he was and employee of an Eligible Employer and meets the following requirements: a. The employee or worker has earned a base salary or annual compensation less than $40,000 for the calendar year 2020 or 2021; and b. When applying, the employee or worker is actively working for an Eligible Employer and has also completed at least five hundred (500) hours of essential work in person since March 1, 2020, carrying out essential work. Condition During our audit procedures on the expenses of the federal program, we found that one payment was made to an employee who did not meet the eligibility requirements. In addition, we identified a payment claimed to the federal program as being made to a specific employee, however, while performing audit procedures on the payment, we noted that the Hospital did not make the payment to the employee and did not return it to the grantor. Cause Involuntary error by an employee who worked with an eligible employee's report used to apply for the funds. The payroll department prepared the report with information from employees' records using specific program eligibility criteria. Then, the report was reviewed and approved by the finance department director. The employee for whom payment was not made resigned in August 2021 after the Hospital determined the eligible employees to be paid but before disbursement of payments. Premium pay funds were received by the Hospital on October 18, 2021 and considered the payment of the employee who resigned. The funds were disbursed to employees on October 29, 2021. Effect As a result of this condition, the U.S. Department of Treasury may request the return of funds, issue warnings and/or impose penalties to the Hospital. Questioned cost Question cost amounted to $4,000. The known questioned cost was calculated by the amount disbursed ($2,000) to the ineligible employee plus the payment not paid ($2,000) to the other employee. Context Of the three hundred fifty-one (351) premium pay payments made, we selected forty (40) payments for testing and noted one (1) instance of noncompliance. When we assessed the entire population, we extended the sample, selected ten (10) additional premium pay payments, and noted the exceptions of the payment not paid to an employee. Identification of a Repeat Finding This is not a repeat finding from the immediate previous audit. Recommendation The management of the Hospital should reinforce its procedures of the administration of federal funds to ensure the compliance with the requirements with each program. Also, the Hospital should establish communication with the Health Department of Puerto Rico in order to obtain instructions for the correction of the non-compliance event and the related questioned cost. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.