Audit 306487

Finding 2023-001 – Significant deficiency in reporting for lack of submitting required documentation to HRSA for previously reported Provider Relief Funds Identification of the federal program: Assistance Listing Number 93.498: • COVID-19 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution • U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) • Federal award identification number – Not Applicable • Federal award year –Period 5: January 1, 2020 to June 30, 2023 Criteria or specific requirement: 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: The University of Vermont Medical Center, Inc. (UVMMC) submitted $22,723,309 in expenditures to the HRSA Provider Relief Fund (PRF) portal for reporting period 1. Subsequently, in March 2022, management opted to submit those same expenditures to an alternate federal funding source and the expenditures were ultimately obligated and reimbursed, thus making them unallowable under HRSA guidelines. For PRF purposes, management determined that UVMMC had sufficient lost revenues to cover the Period 1 PRF receipts in place of the newly unallowable expenditures in line with HRSA guidance (as described in HRSA’s frequently asked questions available on the HRSA website). HRSA guidance requires maintenance of appropriate documentation to support deductions of expenditures from prior reporting periods (as adjustments cannot be made retroactively within the HRSA portal). While this change in expenditure reimbursement approach was extensively discussed and approved by the appropriate level of UVMMC personnel, documentation of this change was not prepared or retained by management until later in June 2023. HRSA guidelines would require management to submit such documentation in their most current PRF submission, however, management failed to notify HRSA of the change and did not attach appropriate documentation in their Period 3 through Period 5 submissions, nor did management attempt to notify HRSA via other means. Cause: Management represented that they performed a review and approval of PRF submissions; however, supporting documentation to evidence the change in reimbursement approach was not appropriately provided to HRSA. Effect or potential effect: A deficiency in the design of internal controls over the review and approval of PRF submissions resulted in management failing to submit supporting documentation notifying HRSA for changes in the expenditure reimbursement approach when they were known. Questioned costs: None. Context: Management prepared an internal memorandum to document the change in expenditure reimbursement approach for Period 1 receipts, however, management failed to include documentation of the change in their subsequent PRF submissions when known. Identification as a repeat finding, if applicable: No. Recommendation: Management should reassess its internal controls over the review and approval of PRF reports to ensure the submission of all required information per HRSA guidelines. Views of responsible individuals: Management agrees and has reassessed its internal controls over the review and approval of PRF submissions. The Network has now completed all PRF portal submissions and this program is coming to an end.

Finding 2023-001 – Significant deficiency in reporting for lack of submitting required documentation to HRSA for previously reported Provider Relief Funds Identification of the federal program: Assistance Listing Number 93.498: • COVID-19 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution • U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) • Federal award identification number – Not Applicable • Federal award year –Period 5: January 1, 2020 to June 30, 2023 Criteria or specific requirement: 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: The University of Vermont Medical Center, Inc. (UVMMC) submitted $22,723,309 in expenditures to the HRSA Provider Relief Fund (PRF) portal for reporting period 1. Subsequently, in March 2022, management opted to submit those same expenditures to an alternate federal funding source and the expenditures were ultimately obligated and reimbursed, thus making them unallowable under HRSA guidelines. For PRF purposes, management determined that UVMMC had sufficient lost revenues to cover the Period 1 PRF receipts in place of the newly unallowable expenditures in line with HRSA guidance (as described in HRSA’s frequently asked questions available on the HRSA website). HRSA guidance requires maintenance of appropriate documentation to support deductions of expenditures from prior reporting periods (as adjustments cannot be made retroactively within the HRSA portal). While this change in expenditure reimbursement approach was extensively discussed and approved by the appropriate level of UVMMC personnel, documentation of this change was not prepared or retained by management until later in June 2023. HRSA guidelines would require management to submit such documentation in their most current PRF submission, however, management failed to notify HRSA of the change and did not attach appropriate documentation in their Period 3 through Period 5 submissions, nor did management attempt to notify HRSA via other means. Cause: Management represented that they performed a review and approval of PRF submissions; however, supporting documentation to evidence the change in reimbursement approach was not appropriately provided to HRSA. Effect or potential effect: A deficiency in the design of internal controls over the review and approval of PRF submissions resulted in management failing to submit supporting documentation notifying HRSA for changes in the expenditure reimbursement approach when they were known. Questioned costs: None. Context: Management prepared an internal memorandum to document the change in expenditure reimbursement approach for Period 1 receipts, however, management failed to include documentation of the change in their subsequent PRF submissions when known. Identification as a repeat finding, if applicable: No. Recommendation: Management should reassess its internal controls over the review and approval of PRF reports to ensure the submission of all required information per HRSA guidelines. Views of responsible individuals: Management agrees and has reassessed its internal controls over the review and approval of PRF submissions. The Network has now completed all PRF portal submissions and this program is coming to an end.