Audit 308322

Federal program Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria The terms and conditions of the CARES Act provider relief fund state the expenses reported need to be for costs incurred to prevent, prepare for, and/or respond to coronavirus during the reporting period. Condition Management appears to have misinterpreted provider relief fund reporting guidance resulting in certain costs being included as allowable during its June 30, 2021 reporting period. Cause Management’s interpretation of the reporting guidance was that certain direct patient care costs of the Health Center, excluding costs reimbursed by others, could be included as allowable costs for provider relief fund reporting. Effect Management included amounts in the PRF reporting portal which do not appear to be eligible based on the terms and conditions of the PRF distributions. Questioned costs Management provided excel workbooks totaling $3,810,750 in allowable PRF expenses and reported total expenses of $3,526,740 in the PRF reporting form, which equals the amount of PRF funds received for period 1. Additionally, as further described in Finding 2021-006, there were several individual expense reporting categories where the Health Center’s excel workbook of costs did not match to the reporting expense categories. We performed our testing on the amounts provided in the excel workbook totaling $3,810,750. During our testing, we noted the following amounts as questioned costs: Personnel: Based on our review of existing guidance, we are questioning $285,248 of costs as they relate to providing direct patient care and were not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Fringe Benefits: Based on our review of existing guidance, we are questioning $410,321 of costs as they relate to fringe benefits associated with salaries and wages either not claimed as COVID-19 and/or related to salaries and wages noted in the preceding section as not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Supplies: Based on our review of existing guidance, we are questioning $215,567 of costs as the Health Center could not provide support specifically identifying the costs as used to treat COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Perspective/Context The errors appear to be due to management’s interpretation that certain direct patient care costs, excluding costs reimbursed by others, could be reported as allowable during the June 30, 2021 reporting period. Recommendation We suggest Health Center management contact HRSA to determine a corrective action regarding the potential costs reported that may not be allowable. Views of responsible officials and planned corrective actions Management agrees with the noted finding. The Health Center does have amounts that could have been reported as lost revenues that would cover some of the questioned costs. The Health Center was unable to include the lost revenue amounts in the original submission because the website did not allow submission of lost revenues if enough costs were reported to cover the PRF funds received.

Federal program Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Material Weakness in Internal Control over Compliance Criteria The Health Center should have sufficient internal controls over PRF reporting to assure amounts reported as allowable costs under the PRF program (FAL 93.498) are concurrently documented and match to individual reported categories of allowable costs. Additionally, the Health Center should have processes in place to assure all other data elements required to be reported are reviewed and accurately reported as required. Conditions Management provided excel workbooks of costs they determined allowable under the PRF program. Although the workbook totals for some cost reporting categories did match the PRF reporting form, there were several categories that did not. Other reporting errors were also noted during our testing of the PRF reporting document. Errors specifically noted were as follows: Single Audit Information Section of PRF Reporting Form: Fiscal years 2019 and 2020 were marked as “yes” subject to Audit (45 CRF 75 Subpart F) when this was true only for fiscal year 2021. Other Assistance Section of PRF Reporting Form: Rural Health Clinic COVID-19 Testing funds of $98,923 received in Q2 of 2020 and $100,000 in Q2 of 2021 should have been reported in this section. Other Provider Relief Fund Payments: April 10, 2020 to June 30, 2020 Payment Period - Other PRF Expenses Section of PRF Reporting Form: Mortgage/Rent PRF reporting form reported costs of $9,675 when the Health Center’s supporting detail excel workbook provided showed $10,970. Personnel PRF reporting form reported costs of $2,173,435 when the Health Center’s supporting detail excel workbook provided showed $1,744,254. Fringe Benefits PRF reporting form reported costs of $478,410 when the Health Center’s supporting detail excel workbook provided showed $624,322. Lease Payments PRF reporting form reported costs of $0 when the Health Center’s supporting detail excel workbook provided showed $71,673. Supplies PRF reporting form reported costs of $476,714 when the Health Center’s supporting detail excel workbook provided showed $315,593. Equipment PRF reporting form reported costs of $128,046 when the Health Center’s supporting detail excel workbook provided showed $488,244. Facilities PRF reporting form reported costs of $75,943 when the Health Center’s supporting detail excel workbook provided showed $100,598. Other Health Care Expenses PRF reporting form reported costs of $0 when the Health Center’s supporting detail excel workbook provided showed $215,683. Unreimbursed Expenses Attributable to Coronavirus Section of PRF Reporting Form: Health Center reported for general and administrative expenses and healthcare related expenses the same line item totals as reported in the Other Provider Relief Fund Payments. Patient Care Revenue Section of PRF Reporting Form: The Health Center was unable to provide us with a reconciliation of its 2019 and 2020 calendar year financial statement revenues that agreed with the amounts reported in the PRF form as 2019 and 2020 actual calendar year revenue. Personnel, Patient and Facility Metrics Section of PRF Reporting Form: The Health Center’s provided internal data for personnel and facility metrics did not match with what was reported in the PRF reporting form. Cause The Health Center did not have sufficient internal controls over the PRF reporting process to assure all required reporting data, including appropriate tracking of costs and correct final reporting by cost category, was accurately reported in the PRF reporting form. Effect and recommendation We suggest the Health Center review its current processes associated with PRF fund reporting and filing requirements to assure all information is accurately reported. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls over the completion of provider relief fund reporting.

Criteria Management should have a process in place to ensure the internal completion of the Schedule of Federal Expenditures (SEFA) including all required disclosures. Condition Management required significant assistance from the external auditors to complete the SEFA. Cause The Health Center had limited personnel with the appropriate experience levels to complete the SEFA without assistance. Effect and recommendation Management required assistance from the auditors to accurately complete the SEFA. We recommend management review its current internal controls over completion of the SEFA to ensure it can be completed with limited assistance provided by its external auditors. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls over the completion of the SEFA.

Criteria The Health Center should have sufficient internal controls to assure the completion and timely filing of its financial statement and compliance audits. Condition The Health Center’s financial statement and compliance audits for the December 31, 2021 reporting period were not filed within the required timeline. Cause The Health Center had various issues that delayed the completion of its financial statement and compliance audits. Effect and recommendation We suggest the Health Center review its current accounting processes to assure the financial statement and compliance audits can be completed and filed on a timely basis as required. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls to assure all future reporting timelines are met.

Federal program Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria The terms and conditions of the CARES Act provider relief fund state the expenses reported need to be for costs incurred to prevent, prepare for, and/or respond to coronavirus during the reporting period. Condition Management appears to have misinterpreted provider relief fund reporting guidance resulting in certain costs being included as allowable during its June 30, 2021 reporting period. Cause Management’s interpretation of the reporting guidance was that certain direct patient care costs of the Health Center, excluding costs reimbursed by others, could be included as allowable costs for provider relief fund reporting. Effect Management included amounts in the PRF reporting portal which do not appear to be eligible based on the terms and conditions of the PRF distributions. Questioned costs Management provided excel workbooks totaling $3,810,750 in allowable PRF expenses and reported total expenses of $3,526,740 in the PRF reporting form, which equals the amount of PRF funds received for period 1. Additionally, as further described in Finding 2021-006, there were several individual expense reporting categories where the Health Center’s excel workbook of costs did not match to the reporting expense categories. We performed our testing on the amounts provided in the excel workbook totaling $3,810,750. During our testing, we noted the following amounts as questioned costs: Personnel: Based on our review of existing guidance, we are questioning $285,248 of costs as they relate to providing direct patient care and were not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Fringe Benefits: Based on our review of existing guidance, we are questioning $410,321 of costs as they relate to fringe benefits associated with salaries and wages either not claimed as COVID-19 and/or related to salaries and wages noted in the preceding section as not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Supplies: Based on our review of existing guidance, we are questioning $215,567 of costs as the Health Center could not provide support specifically identifying the costs as used to treat COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal. Perspective/Context The errors appear to be due to management’s interpretation that certain direct patient care costs, excluding costs reimbursed by others, could be reported as allowable during the June 30, 2021 reporting period. Recommendation We suggest Health Center management contact HRSA to determine a corrective action regarding the potential costs reported that may not be allowable. Views of responsible officials and planned corrective actions Management agrees with the noted finding. The Health Center does have amounts that could have been reported as lost revenues that would cover some of the questioned costs. The Health Center was unable to include the lost revenue amounts in the original submission because the website did not allow submission of lost revenues if enough costs were reported to cover the PRF funds received.

Federal program Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Material Weakness in Internal Control over Compliance Criteria The Health Center should have sufficient internal controls over PRF reporting to assure amounts reported as allowable costs under the PRF program (FAL 93.498) are concurrently documented and match to individual reported categories of allowable costs. Additionally, the Health Center should have processes in place to assure all other data elements required to be reported are reviewed and accurately reported as required. Conditions Management provided excel workbooks of costs they determined allowable under the PRF program. Although the workbook totals for some cost reporting categories did match the PRF reporting form, there were several categories that did not. Other reporting errors were also noted during our testing of the PRF reporting document. Errors specifically noted were as follows: Single Audit Information Section of PRF Reporting Form: Fiscal years 2019 and 2020 were marked as “yes” subject to Audit (45 CRF 75 Subpart F) when this was true only for fiscal year 2021. Other Assistance Section of PRF Reporting Form: Rural Health Clinic COVID-19 Testing funds of $98,923 received in Q2 of 2020 and $100,000 in Q2 of 2021 should have been reported in this section. Other Provider Relief Fund Payments: April 10, 2020 to June 30, 2020 Payment Period - Other PRF Expenses Section of PRF Reporting Form: Mortgage/Rent PRF reporting form reported costs of $9,675 when the Health Center’s supporting detail excel workbook provided showed $10,970. Personnel PRF reporting form reported costs of $2,173,435 when the Health Center’s supporting detail excel workbook provided showed $1,744,254. Fringe Benefits PRF reporting form reported costs of $478,410 when the Health Center’s supporting detail excel workbook provided showed $624,322. Lease Payments PRF reporting form reported costs of $0 when the Health Center’s supporting detail excel workbook provided showed $71,673. Supplies PRF reporting form reported costs of $476,714 when the Health Center’s supporting detail excel workbook provided showed $315,593. Equipment PRF reporting form reported costs of $128,046 when the Health Center’s supporting detail excel workbook provided showed $488,244. Facilities PRF reporting form reported costs of $75,943 when the Health Center’s supporting detail excel workbook provided showed $100,598. Other Health Care Expenses PRF reporting form reported costs of $0 when the Health Center’s supporting detail excel workbook provided showed $215,683. Unreimbursed Expenses Attributable to Coronavirus Section of PRF Reporting Form: Health Center reported for general and administrative expenses and healthcare related expenses the same line item totals as reported in the Other Provider Relief Fund Payments. Patient Care Revenue Section of PRF Reporting Form: The Health Center was unable to provide us with a reconciliation of its 2019 and 2020 calendar year financial statement revenues that agreed with the amounts reported in the PRF form as 2019 and 2020 actual calendar year revenue. Personnel, Patient and Facility Metrics Section of PRF Reporting Form: The Health Center’s provided internal data for personnel and facility metrics did not match with what was reported in the PRF reporting form. Cause The Health Center did not have sufficient internal controls over the PRF reporting process to assure all required reporting data, including appropriate tracking of costs and correct final reporting by cost category, was accurately reported in the PRF reporting form. Effect and recommendation We suggest the Health Center review its current processes associated with PRF fund reporting and filing requirements to assure all information is accurately reported. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls over the completion of provider relief fund reporting.

Criteria Management should have a process in place to ensure the internal completion of the Schedule of Federal Expenditures (SEFA) including all required disclosures. Condition Management required significant assistance from the external auditors to complete the SEFA. Cause The Health Center had limited personnel with the appropriate experience levels to complete the SEFA without assistance. Effect and recommendation Management required assistance from the auditors to accurately complete the SEFA. We recommend management review its current internal controls over completion of the SEFA to ensure it can be completed with limited assistance provided by its external auditors. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls over the completion of the SEFA.

Criteria The Health Center should have sufficient internal controls to assure the completion and timely filing of its financial statement and compliance audits. Condition The Health Center’s financial statement and compliance audits for the December 31, 2021 reporting period were not filed within the required timeline. Cause The Health Center had various issues that delayed the completion of its financial statement and compliance audits. Effect and recommendation We suggest the Health Center review its current accounting processes to assure the financial statement and compliance audits can be completed and filed on a timely basis as required. Views of responsible officials and planned corrective actions Management agrees with the noted finding and although we have limited personnel, we will continue to monitor and enhance our internal controls to assure all future reporting timelines are met.