FAC Explorer

Audit 309734

FY End
2023-09-30
Total Expended
$1.75M
Findings
2
Programs
2
Organization: Lifecare Medical Center (MN)
Year: 2023 Accepted: 2024-06-24
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
401825 2023-002 Material Weakness - L
978267 2023-002 Material Weakness - L

Programs

ALN Program Spent Major Findings
93.498 Covid-19 Provider Relief Fund $1.50M Yes 1
93.155 Rural Health Research Centers $244,084 - 0

Contacts

Name Title Type
V9MUYSYZ7MH3 Michael Tangen Auditee
2184634763 Renee Gravalin Auditor
No contacts on file

Notes to SEFA

Title: COVID-19 Provider Relief Funds and American Rescue Plan (ARP) Rural Distribution Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of LifeCare Medical Center (Medical Center) under programs of the federal government for the year ended September 30, 2023. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Medical Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Medical Center. Expenditures reported in the Schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Medical Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Medical Center received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Program (Federal Financial Assistance Listing #93.498). The PRF expenditures are recognized on the Schedule when the expenditures, including lost revenue, were included in the reporting to HHS for Period 4, defined as payments received between July 1, 2021 and December 31, 2021. As the total amount of $1,504,931 was included in the Period 4 report submitted to HHS, that amount is shown on the accompanying Schedule.

Finding Details

Finding 2023-002
2023‐002 Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #411804205 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ‐ 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Medical Center is required to submit an accurate report to HHS for the filing period that funds were received. Condition ‐ The Medical Center claimed lost revenues attributable to coronavirus in which the revenue calculation did not agree to the HHS special report for one key line item. Cause ‐ The Medical Center had a revenue calculation error of $192,326 on the HHS special report with no impact to the actual lost revenues as the quarter with the error did not result in any lost revenue being reported (i.e., lost revenue claimed was accurate on the HHS special report but key line items were misstated). Effect ‐ While the calculation error did not provide a difference in total between the lost revenues utilized on the HHS special report and the lost revenue calculation, the Medical Center’s reported quarterly resident revenues were inaccurate. This calculation error also indicated a lack of proper reconciliation between the Medical Center’s audited financial statements and the revenues reported within the HHS special report. Questioned Costs ‐ None reported. Context ‐ There were 40 lost revenue key line items tested on which one key line item contained an error which totaled $192,326 (explicit price concessions were overstated for one quarter). The error had no impact on the amount of lost revenue as the quarter impacted did not result in any lost revenue. Repeat Finding from Prior Years – No Recommendation ‐ We recommend that the Medical Center enhance internal control policies to ensure the HHS special report is supported by accurate revenue calculations. This would include reconciling the lost revenue calculation to the audited financial statements within the secondary review of the HHS special report. Views of Responsible Officials ‐ Management agrees with the finding.
Finding 2023-002
2023‐002 Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #411804205 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ‐ 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Medical Center is required to submit an accurate report to HHS for the filing period that funds were received. Condition ‐ The Medical Center claimed lost revenues attributable to coronavirus in which the revenue calculation did not agree to the HHS special report for one key line item. Cause ‐ The Medical Center had a revenue calculation error of $192,326 on the HHS special report with no impact to the actual lost revenues as the quarter with the error did not result in any lost revenue being reported (i.e., lost revenue claimed was accurate on the HHS special report but key line items were misstated). Effect ‐ While the calculation error did not provide a difference in total between the lost revenues utilized on the HHS special report and the lost revenue calculation, the Medical Center’s reported quarterly resident revenues were inaccurate. This calculation error also indicated a lack of proper reconciliation between the Medical Center’s audited financial statements and the revenues reported within the HHS special report. Questioned Costs ‐ None reported. Context ‐ There were 40 lost revenue key line items tested on which one key line item contained an error which totaled $192,326 (explicit price concessions were overstated for one quarter). The error had no impact on the amount of lost revenue as the quarter impacted did not result in any lost revenue. Repeat Finding from Prior Years – No Recommendation ‐ We recommend that the Medical Center enhance internal control policies to ensure the HHS special report is supported by accurate revenue calculations. This would include reconciling the lost revenue calculation to the audited financial statements within the secondary review of the HHS special report. Views of Responsible Officials ‐ Management agrees with the finding.