FAC Explorer

Audit 320263

FY End
2023-12-31
Total Expended
$89.25M
Findings
2
Programs
11
Organization: Adventist Health System/west (CA)
Year: 2023 Accepted: 2024-09-20
Auditor: Ernst & Young LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
497521 2023-001 Material Weakness Yes ABL
1073963 2023-001 Material Weakness Yes ABL

Programs

ALN Program Spent Major Findings
97.036 Covid-19 - Disaster Grants - Public Assistance (presidentially Declared Disasters) $70.87M Yes 0
93.498 Covid-19 - Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $11.65M Yes 1
93.493 Congressional Directives $3.37M Yes 0
97.039 Hazard Mitigation Grant $2.11M - 0
93.155 Rural Health Research Centers $424,971 - 0
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $384,972 - 0
93.912 Covid-19 - Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $282,691 - 0
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $66,588 - 0
93.155 Covid-19 - Rural Health Research Centers $53,458 - 0
14.231 Covid-19 - Emergency Solutions Grant Program $28,000 - 0
93.301 Small Rural Hospital Improvement Grant Program $11,855 - 0

Contacts

Name Title Type
CVNSMM23WXD6 Donald Welch Auditee
5032516804 Jeremy Robinson Auditor
No contacts on file

Notes to SEFA

Title: 1. Summary of Significant Accounting Policies Accounting Policies: 1. Summary of Significant Accounting Policies Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of Adventist Health System/West (Adventist Health) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The SEFA does not include payments received under the traditional Medicare and Medicaid reimbursement programs, as these programs are outside the scope of the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: Adventist Health does not have a negotiated indirect cost rate and uses the 10 percent de minimis indirect cost rate provided for in the Uniform Guidance. 1. Summary of Significant Accounting Policies Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of Adventist Health System/West (Adventist Health) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The SEFA does not include payments received under the traditional Medicare and Medicaid reimbursement programs, as these programs are outside the scope of the Uniform Guidance.
Title: 2. Indirect Costs Accounting Policies: 1. Summary of Significant Accounting Policies Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of Adventist Health System/West (Adventist Health) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The SEFA does not include payments received under the traditional Medicare and Medicaid reimbursement programs, as these programs are outside the scope of the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: Adventist Health does not have a negotiated indirect cost rate and uses the 10 percent de minimis indirect cost rate provided for in the Uniform Guidance. 2. Indirect Costs Adventist Health does not have a negotiated indirect cost rate and uses the 10 percent de minimis indirect cost rate provided for in the Uniform Guidance.
Title: 3. Provider Relief Fund Accounting Policies: 1. Summary of Significant Accounting Policies Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of Adventist Health System/West (Adventist Health) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The SEFA does not include payments received under the traditional Medicare and Medicaid reimbursement programs, as these programs are outside the scope of the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: Adventist Health does not have a negotiated indirect cost rate and uses the 10 percent de minimis indirect cost rate provided for in the Uniform Guidance. 3. Provider Relief Fund The Schedule includes grant activity related to the Department of Health and Human Services (HHS) Coronavirus Aid, Relief, and Economic Security (CARES) Act Assistance Listing Number 93.498. As required based on guidance in the 2023 OMB Compliance Supplement, the Schedule includes all Period 5 funds received between January 1, 2022 and June 30, 2022, and all Period 6 funds received between July 1, 2022 and December 31, 2022 as reported to the Health Resources and Services Administration (HRSA) via the Provider Relief Fund Reporting Portal.
Title: 4. Disaster Grants - Public Assistnace (Presidentially Declared Disasters) Accounting Policies: 1. Summary of Significant Accounting Policies Basis of Accounting The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of Adventist Health System/West (Adventist Health) and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Costs Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The SEFA does not include payments received under the traditional Medicare and Medicaid reimbursement programs, as these programs are outside the scope of the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: Adventist Health does not have a negotiated indirect cost rate and uses the 10 percent de minimis indirect cost rate provided for in the Uniform Guidance. 4. Disaster Grants - Public Assistance (Presidentially Declared Disasters) In fiscal year 2023, Adventist Health System/West received approval from the Federal Emergency Management Agency related to the reimbursement of eligible expenditures of $70,870,189 incurred in previous fiscal years. These expenditures are included in the SEFA in the current year in accordance with guidance provided by the U.S. Department of Homeland Security.

Finding Details

Finding 2023-001
Section III – Federal Award Findings and Questioned Costs Finding 2023-001 Internal control deficiency over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting. 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 • Federal award identification number – Not Applicable • Federal award year: Period 5 – January 1, 2023 to December 31, 2023 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A Chapter II Part 200 Subpart D 200.303 Internal controls. 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: We observed management did not have effective internal controls in place to ensure documentation was retained in order to evidence the operating effectiveness of the internal controls. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirements section above. Effect or potential effect: Management did not retain documentation to evidence the operating effectiveness of the internal controls over the expenditures incurred and the reporting. Questioned Costs: None. Context: We did not test internal controls over the A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles, and L. Reporting compliance requirements, as internal controls were deemed ineffective due to internal control exceptions noted in the prior year (refer to Identification as a repeat finding section below) that would not be resolved for the full period under audit for the year-ended December 31, 2023. Identification as a repeat finding, if applicable: 2022-001 Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate calculation, aggregation, and reporting of expenditures and lost revenues, including supporting that expenditures were used to prevent, prepare for, and respond to coronavirus. This will ensure the expenses and lost revenue reported in the Portal are complete and accurate. Views of Responsible Officials: Adventist Health implemented an action plan and established internal controls last year, following the conclusion of 2022 UG audit. Since the program has ended, no action is required at this time. We have also worked with HRSA to address any issues and findings from previous years. In the future, similar programs will be managed by the Grants Management team, utilizing the established internal controls.
Finding 2023-001
Section III – Federal Award Findings and Questioned Costs Finding 2023-001 Internal control deficiency over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting. 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 • Federal award identification number – Not Applicable • Federal award year: Period 5 – January 1, 2023 to December 31, 2023 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A Chapter II Part 200 Subpart D 200.303 Internal controls. 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: We observed management did not have effective internal controls in place to ensure documentation was retained in order to evidence the operating effectiveness of the internal controls. Cause: Management did not have effective internal controls in place over the compliance requirements as stated in the criteria or specific requirements section above. Effect or potential effect: Management did not retain documentation to evidence the operating effectiveness of the internal controls over the expenditures incurred and the reporting. Questioned Costs: None. Context: We did not test internal controls over the A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles, and L. Reporting compliance requirements, as internal controls were deemed ineffective due to internal control exceptions noted in the prior year (refer to Identification as a repeat finding section below) that would not be resolved for the full period under audit for the year-ended December 31, 2023. Identification as a repeat finding, if applicable: 2022-001 Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate calculation, aggregation, and reporting of expenditures and lost revenues, including supporting that expenditures were used to prevent, prepare for, and respond to coronavirus. This will ensure the expenses and lost revenue reported in the Portal are complete and accurate. Views of Responsible Officials: Adventist Health implemented an action plan and established internal controls last year, following the conclusion of 2022 UG audit. Since the program has ended, no action is required at this time. We have also worked with HRSA to address any issues and findings from previous years. In the future, similar programs will be managed by the Grants Management team, utilizing the established internal controls.