FAC Explorer

Audit 316713

FY End
2021-06-30
Total Expended
$91.80M
Findings
6
Programs
7
Organization: Virginia Commonwealth University Health System (VA)
Year: 2021 Accepted: 2024-08-06
Auditor: Ernst and Young

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
480517 2021-001 Material Weakness Yes P
480518 2021-002 Material Weakness - AB
480519 2021-003 Material Weakness - L
1056959 2021-001 Material Weakness Yes P
1056960 2021-002 Material Weakness - AB
1056961 2021-003 Material Weakness - L

Programs

ALN Program Spent Major Findings
93.498 Covid 19 - Provider Relief Fund $54.74M Yes 1
21.019 Covid - 19 - Coronavirus Relief Fund $35.49M Yes 2
93.461 Covid-19 – Hrsa Covid-19 Claims Reimbursement for the Uninsured Program $920,055 - 0
16.575 Crime Victim Assistance $346,506 - 0
93.917 Hiv Care Formula Grants $155,763 - 0
93.575 Child Care and Development Block Grant $145,296 - 0
45.025 Promotion of the Arts Partnership Agreements $850 - 0

Contacts

Name Title Type
EXF8T7C77MB3 Min Cummings Auditee
8048270545 Amber Brosius Auditor
No contacts on file

Notes to SEFA

Title: 1. Basis of Presentation Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Schedule during the reporting period. Actual results could differ from those estimates.
Title: 2. Indirect Cost Rate Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, the Authority did not make this election.
Title: 3. Subrecipients Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Authority did not pass-through any federal awards to subrecipients.
Title: 4. COVID‑19 – Provider Relief Fund Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. In accordance with the U.S. Department of Health and Human Services’ requirements specific to Federal Assistance Listing Number 93.498, COVID 19 – Provider Relief Fund, the amount presented on the accompanying Schedule for the year ended June 30, 2021 for Federal Assistance Listing No. 93.498 relates to (i) Provider Relief Fund (PRF) payments received from April 10, 2020 through June 30, 2020 and (ii) used for PRF-eligible activity from the period January 1, 2020 through June 30, 2021. This payment receipt period and activity period and the resulting amount presented on the accompanying Schedule for the year ended June 30, 2021, reconciles to the PRF information reported to the Health Resources and Services Administration (HRSA) for PRF Reporting Period 1 as follows: [See the Notes to the SEFA for table] Health and Human Services (HHS) has indicated the PRF Funds should be reported according to the reporting requirements of the HRSA PRF Reporting Portal (the “Portal”). Payments from HHS for PRF are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the PRF was received. Each Period has a specified Period of Availability and timing of reporting requirements. Entities report into the Portal after each Period’s deadline to use the funds (i.e., after the end of the Period of Availability). The accompanying Schedule includes $54,742,163 of PRF Funds received from HHS between April 10, 2020 through June 30, 2020. The PRF-eligible expenses attributable to Coronavirus Disease 2019 (COVID 19) and lost revenues incurred by the Authority during the period of availability for PRF Reporting Period 1 (January 1, 2020 through June 30, 2021) are in excess of the general and targeted distributions received from April 10, 2020 through June 30, 2020 and, therefore, the amounts presented in the table above and on the accompanying Schedule are limited to the amount of such distributions. The Authority also received PRF payments subsequent to June 30, 2020, which are required to be reported in subsequent HRSA PRF Reporting Periods and, accordingly, pursuant to the requirements specific to Federal Assistance Listing Number 93.498, activity related to such payments is excluded from the accompanying Schedule.
Title: 5. Noncash Federal Assistance Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes all federal grants to Virginia Commonwealth University Health System Authority (the Authority) that had federal expenditure activity during fiscal year 2021. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with the applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (Note 4). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the Authority. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Authority did not receive any noncash Federal assistance including donated personal protective equipment for the year ended June 30, 2021.

Finding Details

Finding 2021-001
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Condition The Authority had not finalized the Schedule of Expenditures of Federal Awards (the Schedule) for the year ended June 30, 2021 in a timely manner. Cause The Schedule for the year ended June 30, 2021 included a number of COVID-19 programs. Various individuals in the Authority were involved and responsible for monitoring the terms and conditions of the federal awards and reporting of the federal expenditures. COVID-19 also impacted a number of resources within the Authority causing various constraints. Management continued to enhance procedures related to preparation and assessment of the Schedule. However, assistance listing number 21.019 – COVID-19 – Coronavirus Relief Fund continued to cause delays, which was the primary driver in the delay in the finalization of the Schedule. Refer to finding 2021-002 for further details. Effect or potential effect The reporting and verification of the completeness and accuracy of the expenditures required more time than expected due to the COVID-19 nature of the funds. Questioned costs None. Context The audit was not completed and the reporting submitted within the earlier of 30 calendar days after receipt of the auditor’s reports, or nine months after the end of the audit period as required by the Uniform Guidance. Identification of a repeat finding This is a repeat finding of Finding 2020-001 in the prior year. Recommendation The Authority’s policy and procedures should be designed to ensure timely reporting as required by the Uniform Guidance. View of responsible officials There is no disagreement with the audit finding.
Finding 2021-002
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Condition Management did not have sufficiently designed internal controls to review the completeness and accuracy of the expenditure schedule for the Coronavirus Relief Fund (CRF) for the year ended June 30, 2021. Management did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures. Cause Management designed a process to accumulate and review COVID-19 expenditures. However, due to the various COVID-19 programs, the expenditures were segregated for different federal program reimbursements. Based on the timing of the other federal program requests, COVID-19 expenditures were modified based on the allowability provisions related to each program. As a result, management prepared various versions of the expenditure schedules for the CRF. Management’s controls over the review of the completeness and accuracy of the final CRF expenditure schedule, including reconciliation to the Schedule of Expenditures of Federal Awards (the Schedule) and review of duplication of benefits within the other federal program reimbursements, was not sufficiently designed to identify errors within the populations. Effect or potential effect A lack of review of the completeness and accuracy of the CRF expenditure schedule could result in a expenditures being reimbursed by other sources. The CRF expenditure schedule was not complete and accuracy and therefore, did not agree to the Schedule. The CRF expenditure schedule included purchase order information and did not include final invoice and related payments. As such, the expenditures were overstated from what was recorded in the general ledger. Questioned costs None. Context The CRF expenditure schedule included COVID-19 related expenditures for the periods July 1, 2020 through June 30, 2021. The expenditure schedule was revised during the audit as Management identified expenditures that were targeted for reimbursement by other federal sources. As a result, various errors were identified within the populations including lack of agreement to the Schedule and amounts that did not result in payments. The total expenditure schedule included $37,362,139 of CRF expenditures. This exceeded the expenditures reported on the Schedule and the grant approved amounts for the Authority. As such, there were no questioned costs identified as part of our testing. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that Management develop and implement effective internal controls to ensure that expenditures are reviewed for completeness and accuracy to ensure that information is reported appropriately, including on the Schedule for Uniform Guidance compliance purposes. View of responsible officials There is no disagreement with the audit finding.
Finding 2021-003
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” The terms and conditions of the award require the recipient to submit reports to the secretary of HHS for each reporting period to ensure compliance with conditions that are imposed on the payment, and such report shall be in such form, with such content, as specified by the secretary of HHS in program instructions directed to all recipients. Condition Management did not have sufficiently designed internal controls to review the supporting documentation used in the Provider Relief Fund (PRF) lost revenue calculation and the data submitted in the HHS portal. The amount of the revenue reported to HRSA in the HHS portal for Period 1 for April 10, 2020 to June 30, 2021 did not agree to the amounts recorded in the general ledger. Cause The Authority did not retain sufficient appropriate evidence of review and approval of amounts quantified as lost revenues attributable to COVID-19 that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management entered the incorrect information into the HHS portal. Management’s internal controls over the review and approval of the HHS portal data was not sufficiently robust to identify data input errors. Effect or potential effect A lack of internal controls over the review of the PRF lost revenue calculation submitted in the HHS portal could result in a misstatement of the amounts reported in the HHS portal. Potential effects include inappropriate amounts of lost revenue quantified that could impact the complete and accurate reporting of such amounts submitted to HRSA’s PRF Reporting Portal and amounts ultimately received by the Authority that could result in funds ultimately being required to be returned to HRSA. Questioned costs None. Context There was a total of 4 HHS portal submission for the year ended June 30, 2021. The PRF lost revenue reported on the Authority’s submission to HRSA’s PRF Reporting Portal amounted to $284,074,950. The total lost revenue supported by the Authority’s underlying calculations of lost revenue amounted to $247,585,299 for the year ended June 30, 2021. Therefore, Management reported $36,489,651 more in lost revenues in the portal than their supporting calculation. This difference had no impact on the amount received by the Authority from HHS under this program. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that Management develop and implement effective internal controls to ensure PRF lost revenue calculations are reviewed and approved to ensure that the report submissions are accurate. The Authority should retain sufficient supporting documentation to support the lost revenue calculation was reviewed, approved, and calculated in accordance with the terms of the federal program during the period. View of responsible officials There is no disagreement with the audit finding.
Finding 2021-001
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Condition The Authority had not finalized the Schedule of Expenditures of Federal Awards (the Schedule) for the year ended June 30, 2021 in a timely manner. Cause The Schedule for the year ended June 30, 2021 included a number of COVID-19 programs. Various individuals in the Authority were involved and responsible for monitoring the terms and conditions of the federal awards and reporting of the federal expenditures. COVID-19 also impacted a number of resources within the Authority causing various constraints. Management continued to enhance procedures related to preparation and assessment of the Schedule. However, assistance listing number 21.019 – COVID-19 – Coronavirus Relief Fund continued to cause delays, which was the primary driver in the delay in the finalization of the Schedule. Refer to finding 2021-002 for further details. Effect or potential effect The reporting and verification of the completeness and accuracy of the expenditures required more time than expected due to the COVID-19 nature of the funds. Questioned costs None. Context The audit was not completed and the reporting submitted within the earlier of 30 calendar days after receipt of the auditor’s reports, or nine months after the end of the audit period as required by the Uniform Guidance. Identification of a repeat finding This is a repeat finding of Finding 2020-001 in the prior year. Recommendation The Authority’s policy and procedures should be designed to ensure timely reporting as required by the Uniform Guidance. View of responsible officials There is no disagreement with the audit finding.
Finding 2021-002
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Condition Management did not have sufficiently designed internal controls to review the completeness and accuracy of the expenditure schedule for the Coronavirus Relief Fund (CRF) for the year ended June 30, 2021. Management did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures. Cause Management designed a process to accumulate and review COVID-19 expenditures. However, due to the various COVID-19 programs, the expenditures were segregated for different federal program reimbursements. Based on the timing of the other federal program requests, COVID-19 expenditures were modified based on the allowability provisions related to each program. As a result, management prepared various versions of the expenditure schedules for the CRF. Management’s controls over the review of the completeness and accuracy of the final CRF expenditure schedule, including reconciliation to the Schedule of Expenditures of Federal Awards (the Schedule) and review of duplication of benefits within the other federal program reimbursements, was not sufficiently designed to identify errors within the populations. Effect or potential effect A lack of review of the completeness and accuracy of the CRF expenditure schedule could result in a expenditures being reimbursed by other sources. The CRF expenditure schedule was not complete and accuracy and therefore, did not agree to the Schedule. The CRF expenditure schedule included purchase order information and did not include final invoice and related payments. As such, the expenditures were overstated from what was recorded in the general ledger. Questioned costs None. Context The CRF expenditure schedule included COVID-19 related expenditures for the periods July 1, 2020 through June 30, 2021. The expenditure schedule was revised during the audit as Management identified expenditures that were targeted for reimbursement by other federal sources. As a result, various errors were identified within the populations including lack of agreement to the Schedule and amounts that did not result in payments. The total expenditure schedule included $37,362,139 of CRF expenditures. This exceeded the expenditures reported on the Schedule and the grant approved amounts for the Authority. As such, there were no questioned costs identified as part of our testing. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that Management develop and implement effective internal controls to ensure that expenditures are reviewed for completeness and accuracy to ensure that information is reported appropriately, including on the Schedule for Uniform Guidance compliance purposes. View of responsible officials There is no disagreement with the audit finding.
Finding 2021-003
Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” The terms and conditions of the award require the recipient to submit reports to the secretary of HHS for each reporting period to ensure compliance with conditions that are imposed on the payment, and such report shall be in such form, with such content, as specified by the secretary of HHS in program instructions directed to all recipients. Condition Management did not have sufficiently designed internal controls to review the supporting documentation used in the Provider Relief Fund (PRF) lost revenue calculation and the data submitted in the HHS portal. The amount of the revenue reported to HRSA in the HHS portal for Period 1 for April 10, 2020 to June 30, 2021 did not agree to the amounts recorded in the general ledger. Cause The Authority did not retain sufficient appropriate evidence of review and approval of amounts quantified as lost revenues attributable to COVID-19 that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management entered the incorrect information into the HHS portal. Management’s internal controls over the review and approval of the HHS portal data was not sufficiently robust to identify data input errors. Effect or potential effect A lack of internal controls over the review of the PRF lost revenue calculation submitted in the HHS portal could result in a misstatement of the amounts reported in the HHS portal. Potential effects include inappropriate amounts of lost revenue quantified that could impact the complete and accurate reporting of such amounts submitted to HRSA’s PRF Reporting Portal and amounts ultimately received by the Authority that could result in funds ultimately being required to be returned to HRSA. Questioned costs None. Context There was a total of 4 HHS portal submission for the year ended June 30, 2021. The PRF lost revenue reported on the Authority’s submission to HRSA’s PRF Reporting Portal amounted to $284,074,950. The total lost revenue supported by the Authority’s underlying calculations of lost revenue amounted to $247,585,299 for the year ended June 30, 2021. Therefore, Management reported $36,489,651 more in lost revenues in the portal than their supporting calculation. This difference had no impact on the amount received by the Authority from HHS under this program. Identification of a repeat finding This is not a repeat finding. Recommendation We recommend that Management develop and implement effective internal controls to ensure PRF lost revenue calculations are reviewed and approved to ensure that the report submissions are accurate. The Authority should retain sufficient supporting documentation to support the lost revenue calculation was reviewed, approved, and calculated in accordance with the terms of the federal program during the period. View of responsible officials There is no disagreement with the audit finding.