Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and
TIN #381649577
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting
Material Weakness in Internal Control Over Compliance
Criteria: 2 CFR 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. The Corporation claimed expenses based on specifically identified COVID related expenses and general and administrative expenses.
Condition: The Corporation’s final expenditure listing identified as eligible and claimed under the Provider Relief Fund program as well as the prepared lost revenue calculation were not reviewed and approved by a separate individual outside of the preparer.
Cause: The Corporation did not have an internal control process in place to ensure a secondary review and approval of the lost revenue calculation or of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing was formally documented. The summary spreadsheet was used to claim allowable costs under the federal program. In addition, the review and approval of the report submitted to the Department of Health and Human Services for Period 3 and Period 4 were not performed by someone other than the preparer of the report.
Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may have been claimed under the program and the report may not have been accurately completed.
Questioned Costs: None reported.
Context/Sampling: Both the final expenditure listing and the lost revenue calculation were obtained and did not have evidence of review by someone other than the preparer (i.e., population of two). In addition, a nonstatistical sample of 23 ($680,419) out of 113 expenditures ($2,067,114) were tested and the 23 expenditures did not show evidence of a review to ensure the expenditures were qualified COVID-19 related expenditures.
Repeat Finding from Prior Years: Yes, Finding 2021-003
Recommendation: We recommend the Corporation implement a control process which includes a secondary review and approval of the summarized final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency.
Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and TIN #381649577
Reporting
Material Weakness in Internal Control Over Compliance and Material Noncompliance
Criteria: 2 CFR 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: The Corporation’s final lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program did not agree to the amount claimed in the report submitted to the Department of Health and Human Services for Period 3 and Period 4. Additionally, the Corporation’s total net patient care revenues did not agree to the amount in the report submitted to the Department of Health and Human Services for Period 4.
Cause: The Corporation recalculated lost revenue and noted multiple adjustments to the amount that could be claimed, as well as the Corporation reported revenue amounts that did not accurately reflect the net patient care revenues reported on the audited financial statements.
Effect: The lost revenue difference in what was accurately calculated compared to what was reported led to an incorrect filing and a claim of more support for lost revenue than was needed. Additionally, the revenue difference in what was reported on the audited financial statements compared to what was reported led to an incorrect filing of total net patient care revenues.
Questioned Costs: None reported.
Context: Lost revenue reported to the Department of Health and Human Services totaled $3,278,318. After corrections were made to the lost revenue support calculation, lost revenues should have been $3,161,203 for a difference of $117,115. Additionally, revenues reported to the Department of Health and Human Services compared to the audited financial statements differed by $1,957,103.
Repeat Finding from Prior Years: Yes, Finding 2021-004
Recommendation: We recommend that management reviewed their process and procedures to include monitoring over amounts reported relating to total revenues, lost revenue amounts and the related calculation.
Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and TIN #381649577
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance
Criteria: 2 CFR 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: The Corporation claimed expenses that did not tie to supporting documentation and expenses that were reimbursed by other funding sources (i.e., Medicare). These expenses were improperly included in the HHS Special Report which caused the report to be inaccurate.
Cause: The Corporation did not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs and to ensure that expenses claimed in the Special Report were complete and accurate.
Effect: The lack of adequate policies governing expenses and preparation and submission of the Report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Corporation submitted expenses over their actual allowable expenses.
Questioned Costs: $268,391 which was reimbursed from other sources and an additional $2,471 that was unsupported.
Context: A nonstatistical sample of 23 expenditures was selected for testing, which accounted for $680,419 of $2,067,014 of direct program expenditures.
Repeat Finding from Prior Years: Yes, Finding 2021-005
Recommendation: We recommend that the Corporation enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Special Report required to be submitted to the federal agency. We also recommend the Corporation enhance internal control policies to ensure that the required Reports are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the Special Reports required to be submitted to the federal agency.
Views of Responsible Officials: Management agrees with the finding.
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 3 and Period 4 TIN #382628943 and TIN #381649577
Preparation of Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance - Other
Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule.
Condition: The Corporation does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. The Corporation requested Eide Bailly LLP to draft the Schedule.
Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Corporation meets a specified threshold of federal expenditures.
Effect: There is a reasonable possibility that the Corporation would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Years: No
Recommendation: We recommend management be aware of the financial reporting requirements relating to the Corporation’s schedule of expenditures of federal awards and the internal controls that impact financial reporting.
View of Responsible Officials: Management agrees with the finding.
Department of Agriculture
Federal Assistance Listing #10.766
Community Facilities Loans and Grants
Preparation of Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2022-006 due to requirement of the Federal Audit Clearinghouse)
Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule.
Condition: The Corporation does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. The Corporation requested Eide Bailly LLP to draft the Schedule.
Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Corporation meets a specified threshold of federal expenditures.
Effect: There is a reasonable possibility that the Corporation would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Years: No
Recommendation: We recommend management be aware of the financial reporting requirements relating to the Corporation’s schedule of expenditures of federal awards and the internal controls that impact financial reporting.
View of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and
TIN #381649577
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting
Material Weakness in Internal Control Over Compliance
Criteria: 2 CFR 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. The Corporation claimed expenses based on specifically identified COVID related expenses and general and administrative expenses.
Condition: The Corporation’s final expenditure listing identified as eligible and claimed under the Provider Relief Fund program as well as the prepared lost revenue calculation were not reviewed and approved by a separate individual outside of the preparer.
Cause: The Corporation did not have an internal control process in place to ensure a secondary review and approval of the lost revenue calculation or of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing was formally documented. The summary spreadsheet was used to claim allowable costs under the federal program. In addition, the review and approval of the report submitted to the Department of Health and Human Services for Period 3 and Period 4 were not performed by someone other than the preparer of the report.
Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may have been claimed under the program and the report may not have been accurately completed.
Questioned Costs: None reported.
Context/Sampling: Both the final expenditure listing and the lost revenue calculation were obtained and did not have evidence of review by someone other than the preparer (i.e., population of two). In addition, a nonstatistical sample of 23 ($680,419) out of 113 expenditures ($2,067,114) were tested and the 23 expenditures did not show evidence of a review to ensure the expenditures were qualified COVID-19 related expenditures.
Repeat Finding from Prior Years: Yes, Finding 2021-003
Recommendation: We recommend the Corporation implement a control process which includes a secondary review and approval of the summarized final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency.
Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and TIN #381649577
Reporting
Material Weakness in Internal Control Over Compliance and Material Noncompliance
Criteria: 2 CFR 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: The Corporation’s final lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program did not agree to the amount claimed in the report submitted to the Department of Health and Human Services for Period 3 and Period 4. Additionally, the Corporation’s total net patient care revenues did not agree to the amount in the report submitted to the Department of Health and Human Services for Period 4.
Cause: The Corporation recalculated lost revenue and noted multiple adjustments to the amount that could be claimed, as well as the Corporation reported revenue amounts that did not accurately reflect the net patient care revenues reported on the audited financial statements.
Effect: The lost revenue difference in what was accurately calculated compared to what was reported led to an incorrect filing and a claim of more support for lost revenue than was needed. Additionally, the revenue difference in what was reported on the audited financial statements compared to what was reported led to an incorrect filing of total net patient care revenues.
Questioned Costs: None reported.
Context: Lost revenue reported to the Department of Health and Human Services totaled $3,278,318. After corrections were made to the lost revenue support calculation, lost revenues should have been $3,161,203 for a difference of $117,115. Additionally, revenues reported to the Department of Health and Human Services compared to the audited financial statements differed by $1,957,103.
Repeat Finding from Prior Years: Yes, Finding 2021-004
Recommendation: We recommend that management reviewed their process and procedures to include monitoring over amounts reported relating to total revenues, lost revenue amounts and the related calculation.
Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and TIN #381649577
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance
Criteria: 2 CFR 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: The Corporation claimed expenses that did not tie to supporting documentation and expenses that were reimbursed by other funding sources (i.e., Medicare). These expenses were improperly included in the HHS Special Report which caused the report to be inaccurate.
Cause: The Corporation did not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs and to ensure that expenses claimed in the Special Report were complete and accurate.
Effect: The lack of adequate policies governing expenses and preparation and submission of the Report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Corporation submitted expenses over their actual allowable expenses.
Questioned Costs: $268,391 which was reimbursed from other sources and an additional $2,471 that was unsupported.
Context: A nonstatistical sample of 23 expenditures was selected for testing, which accounted for $680,419 of $2,067,014 of direct program expenditures.
Repeat Finding from Prior Years: Yes, Finding 2021-005
Recommendation: We recommend that the Corporation enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Special Report required to be submitted to the federal agency. We also recommend the Corporation enhance internal control policies to ensure that the required Reports are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the Special Reports required to be submitted to the federal agency.
Views of Responsible Officials: Management agrees with the finding.
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 3 and Period 4 TIN #382628943 and TIN #381649577
Preparation of Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance - Other
Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule.
Condition: The Corporation does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. The Corporation requested Eide Bailly LLP to draft the Schedule.
Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Corporation meets a specified threshold of federal expenditures.
Effect: There is a reasonable possibility that the Corporation would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Years: No
Recommendation: We recommend management be aware of the financial reporting requirements relating to the Corporation’s schedule of expenditures of federal awards and the internal controls that impact financial reporting.
View of Responsible Officials: Management agrees with the finding.
Department of Agriculture
Federal Assistance Listing #10.766
Community Facilities Loans and Grants
Preparation of Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2022-006 due to requirement of the Federal Audit Clearinghouse)
Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule.
Condition: The Corporation does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. The Corporation requested Eide Bailly LLP to draft the Schedule.
Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Corporation meets a specified threshold of federal expenditures.
Effect: There is a reasonable possibility that the Corporation would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Years: No
Recommendation: We recommend management be aware of the financial reporting requirements relating to the Corporation’s schedule of expenditures of federal awards and the internal controls that impact financial reporting.
View of Responsible Officials: Management agrees with the finding.