2022-004 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #410758512Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control over Compliance and NoncomplianceReportingMaterial Weakness in Internal Control over Compliance and Material NoncomplianceCriteria: 2 CRF 200.303(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 statutes, regulations, and conditions of the federal award.Condition: During testing we identified the following:- No formal documentation of review and approval of the Hospital?s final expenditures listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (the program) was retained.- Payroll reports to support the COVID-related bonuses based on hours worked were not retained and were not able to be recreated.- Some expenses claimed under the program were incurred before the Hospital started preparing, preventing, and responding to COVID. Net costs of $36,540.- Equipment and information technology expenses claimed under other sources of funding were claimed under the program. Net actual costs of $6,080.- Utility expenses and personnel expenses were overclaimed under the program based on a review of supporting documentation. Net costs of $2,985 with projected net costs of $3,827.- No formal documentation of review and approval of the Hospital?s lost revenue calculation and the Hospital?s special report submitted to HHS for Period 1 TIN #410758512 was retained.- The lost revenue narrative to describe the option iii calculation did not agree with the supporting calculation performed for January and February 2021. The narrative indicated a comparison to January and February of 2019, but the calculation was done based on January and February 2020 trended revenue.- Expenses claimed under the program and included within the Hospital?s special report submitted to the Department of Health and Human Services (HHS) for Period 1 TIN #410758512 were reported at gross cost and did not consider the Hospital?s Medicare Cost Reimbursement percentage. Net costs of $880,880.Cause: Management did not retain documentation of the review and approval of the final expenditures listing, lost revenue calculation, and the special report submitted to HHS for Period 1 TIN #410758512. When preparing the final expenditures listing, management claimed expenses which were incurred prior to the Hospital preparing, preventing, and responding to COVID and management overlooked two expenses being claimed under other funding sources. Utility expenses and personnel expenses were overclaimed based upon review of supporting documentation. When completing the special report submitted to HHS for Period 1 TIN #410758512, management claimed expenses at gross and reported the same expenses net of Medicare reimbursement within the unreimbursed section of the special report.Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures are claimed under the program and included within the special report and the lost revenue calculation may not be calculated in accordance with the terms and conditions of the program. Expenses included within the special report submitted to HHS for Period 1 TIN #410758512 were overstated by net costs of $926,485.Questioned Costs: As reported in Period 1, the Hospital has additional lost revenue that exceeds the expenses identified during testing. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Expenses included within the special report submitted to HHS for Period 1 were overstated by net costs of $926,485.Context: A nonstatistical sample of 60 ($82,114) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including personnel, fringe benefits, supplies, equipment, and information technology ($143,368) were tested. Summary level testing was performed over general and administrative and healthcare related expenses, including mortgage, insurance, utilities, personnel, and facilities. Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend management retain formal documentation of review and approval process of the final expenditures listing, lost revenue and special reports submitted to the federal agency. In addition, we recommend management update any future special reports submitted to the Department of Health and Human Services as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #410758512Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control over Compliance and NoncomplianceReportingMaterial Weakness in Internal Control over Compliance and Material NoncomplianceCriteria: 2 CRF 200.303(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 statutes, regulations, and conditions of the federal award.Condition: During testing we identified the following:- No formal documentation of review and approval of the Hospital?s final expenditures listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (the program) was retained.- Payroll reports to support the COVID-related bonuses based on hours worked were not retained and were not able to be recreated.- Some expenses claimed under the program were incurred before the Hospital started preparing, preventing, and responding to COVID. Net costs of $36,540.- Equipment and information technology expenses claimed under other sources of funding were claimed under the program. Net actual costs of $6,080.- Utility expenses and personnel expenses were overclaimed under the program based on a review of supporting documentation. Net costs of $2,985 with projected net costs of $3,827.- No formal documentation of review and approval of the Hospital?s lost revenue calculation and the Hospital?s special report submitted to HHS for Period 1 TIN #410758512 was retained.- The lost revenue narrative to describe the option iii calculation did not agree with the supporting calculation performed for January and February 2021. The narrative indicated a comparison to January and February of 2019, but the calculation was done based on January and February 2020 trended revenue.- Expenses claimed under the program and included within the Hospital?s special report submitted to the Department of Health and Human Services (HHS) for Period 1 TIN #410758512 were reported at gross cost and did not consider the Hospital?s Medicare Cost Reimbursement percentage. Net costs of $880,880.Cause: Management did not retain documentation of the review and approval of the final expenditures listing, lost revenue calculation, and the special report submitted to HHS for Period 1 TIN #410758512. When preparing the final expenditures listing, management claimed expenses which were incurred prior to the Hospital preparing, preventing, and responding to COVID and management overlooked two expenses being claimed under other funding sources. Utility expenses and personnel expenses were overclaimed based upon review of supporting documentation. When completing the special report submitted to HHS for Period 1 TIN #410758512, management claimed expenses at gross and reported the same expenses net of Medicare reimbursement within the unreimbursed section of the special report.Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures are claimed under the program and included within the special report and the lost revenue calculation may not be calculated in accordance with the terms and conditions of the program. Expenses included within the special report submitted to HHS for Period 1 TIN #410758512 were overstated by net costs of $926,485.Questioned Costs: As reported in Period 1, the Hospital has additional lost revenue that exceeds the expenses identified during testing. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Expenses included within the special report submitted to HHS for Period 1 were overstated by net costs of $926,485.Context: A nonstatistical sample of 60 ($82,114) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including personnel, fringe benefits, supplies, equipment, and information technology ($143,368) were tested. Summary level testing was performed over general and administrative and healthcare related expenses, including mortgage, insurance, utilities, personnel, and facilities. Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend management retain formal documentation of review and approval process of the final expenditures listing, lost revenue and special reports submitted to the federal agency. In addition, we recommend management update any future special reports submitted to the Department of Health and Human Services as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #410758512Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control over Compliance and NoncomplianceReportingMaterial Weakness in Internal Control over Compliance and Material NoncomplianceCriteria: 2 CRF 200.303(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 statutes, regulations, and conditions of the federal award.Condition: During testing we identified the following:- No formal documentation of review and approval of the Hospital?s final expenditures listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (the program) was retained.- Payroll reports to support the COVID-related bonuses based on hours worked were not retained and were not able to be recreated.- Some expenses claimed under the program were incurred before the Hospital started preparing, preventing, and responding to COVID. Net costs of $36,540.- Equipment and information technology expenses claimed under other sources of funding were claimed under the program. Net actual costs of $6,080.- Utility expenses and personnel expenses were overclaimed under the program based on a review of supporting documentation. Net costs of $2,985 with projected net costs of $3,827.- No formal documentation of review and approval of the Hospital?s lost revenue calculation and the Hospital?s special report submitted to HHS for Period 1 TIN #410758512 was retained.- The lost revenue narrative to describe the option iii calculation did not agree with the supporting calculation performed for January and February 2021. The narrative indicated a comparison to January and February of 2019, but the calculation was done based on January and February 2020 trended revenue.- Expenses claimed under the program and included within the Hospital?s special report submitted to the Department of Health and Human Services (HHS) for Period 1 TIN #410758512 were reported at gross cost and did not consider the Hospital?s Medicare Cost Reimbursement percentage. Net costs of $880,880.Cause: Management did not retain documentation of the review and approval of the final expenditures listing, lost revenue calculation, and the special report submitted to HHS for Period 1 TIN #410758512. When preparing the final expenditures listing, management claimed expenses which were incurred prior to the Hospital preparing, preventing, and responding to COVID and management overlooked two expenses being claimed under other funding sources. Utility expenses and personnel expenses were overclaimed based upon review of supporting documentation. When completing the special report submitted to HHS for Period 1 TIN #410758512, management claimed expenses at gross and reported the same expenses net of Medicare reimbursement within the unreimbursed section of the special report.Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures are claimed under the program and included within the special report and the lost revenue calculation may not be calculated in accordance with the terms and conditions of the program. Expenses included within the special report submitted to HHS for Period 1 TIN #410758512 were overstated by net costs of $926,485.Questioned Costs: As reported in Period 1, the Hospital has additional lost revenue that exceeds the expenses identified during testing. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Expenses included within the special report submitted to HHS for Period 1 were overstated by net costs of $926,485.Context: A nonstatistical sample of 60 ($82,114) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including personnel, fringe benefits, supplies, equipment, and information technology ($143,368) were tested. Summary level testing was performed over general and administrative and healthcare related expenses, including mortgage, insurance, utilities, personnel, and facilities. Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend management retain formal documentation of review and approval process of the final expenditures listing, lost revenue and special reports submitted to the federal agency. In addition, we recommend management update any future special reports submitted to the Department of Health and Human Services as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #410758512Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control over Compliance and NoncomplianceReportingMaterial Weakness in Internal Control over Compliance and Material NoncomplianceCriteria: 2 CRF 200.303(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 statutes, regulations, and conditions of the federal award.Condition: During testing we identified the following:- No formal documentation of review and approval of the Hospital?s final expenditures listing identified as eligible and claimed under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (the program) was retained.- Payroll reports to support the COVID-related bonuses based on hours worked were not retained and were not able to be recreated.- Some expenses claimed under the program were incurred before the Hospital started preparing, preventing, and responding to COVID. Net costs of $36,540.- Equipment and information technology expenses claimed under other sources of funding were claimed under the program. Net actual costs of $6,080.- Utility expenses and personnel expenses were overclaimed under the program based on a review of supporting documentation. Net costs of $2,985 with projected net costs of $3,827.- No formal documentation of review and approval of the Hospital?s lost revenue calculation and the Hospital?s special report submitted to HHS for Period 1 TIN #410758512 was retained.- The lost revenue narrative to describe the option iii calculation did not agree with the supporting calculation performed for January and February 2021. The narrative indicated a comparison to January and February of 2019, but the calculation was done based on January and February 2020 trended revenue.- Expenses claimed under the program and included within the Hospital?s special report submitted to the Department of Health and Human Services (HHS) for Period 1 TIN #410758512 were reported at gross cost and did not consider the Hospital?s Medicare Cost Reimbursement percentage. Net costs of $880,880.Cause: Management did not retain documentation of the review and approval of the final expenditures listing, lost revenue calculation, and the special report submitted to HHS for Period 1 TIN #410758512. When preparing the final expenditures listing, management claimed expenses which were incurred prior to the Hospital preparing, preventing, and responding to COVID and management overlooked two expenses being claimed under other funding sources. Utility expenses and personnel expenses were overclaimed based upon review of supporting documentation. When completing the special report submitted to HHS for Period 1 TIN #410758512, management claimed expenses at gross and reported the same expenses net of Medicare reimbursement within the unreimbursed section of the special report.Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures are claimed under the program and included within the special report and the lost revenue calculation may not be calculated in accordance with the terms and conditions of the program. Expenses included within the special report submitted to HHS for Period 1 TIN #410758512 were overstated by net costs of $926,485.Questioned Costs: As reported in Period 1, the Hospital has additional lost revenue that exceeds the expenses identified during testing. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Expenses included within the special report submitted to HHS for Period 1 were overstated by net costs of $926,485.Context: A nonstatistical sample of 60 ($82,114) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including personnel, fringe benefits, supplies, equipment, and information technology ($143,368) were tested. Summary level testing was performed over general and administrative and healthcare related expenses, including mortgage, insurance, utilities, personnel, and facilities. Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend management retain formal documentation of review and approval process of the final expenditures listing, lost revenue and special reports submitted to the federal agency. In addition, we recommend management update any future special reports submitted to the Department of Health and Human Services as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.