2023-002 U.S. 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 #810515463
Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting
Significant Deficiency 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 COVID related incremental expenses. The
Corporation selected Option i and Option iii to calculate lost revenue (this varied based
on specific entity).
Condition – During our testing, we noted reviews were performed over individual
eligible expenditures; however, there was no formal review or approval of the
expenditure spreadsheet used to calculate the expenditures claimed for the federal
program outside of the preparer at the LH Chester location. In addition, there was no
evidence retained that the Corporation’s HHS Special Report submitted to the
Department of Health and Human Services for Period 4 was reviewed and approved by a
separate individual outside of the preparer at the LH Chester location.
Cause – The Corporation did not have an adequate internal control policy in place to
ensure review and approval over tracking of other funding sources, lost revenue, or
reporting was documented at all locations.
Effect – The lack of adequate policies governing review increases the risk that
employees participating in the federal award administration may not be able to detect
and correct noncompliance in a timely manner.
Questioned Costs – None reported.
Context/Sampling – Detail testing was performed over eligible expenditures for
activities allowed and unallowable and allowable cost/cost principles. There were nine
HHS Special Reports in the population and all were tested of which one did not have
documented evidence of proper review.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that the Corporation enhance internal control
policies to ensure that formal documentation of reviews is present at for all supporting
documentation and reports all locations.
Views of Responsible Officials – Management agrees with the finding.
2023-003 U.S. 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 #237293874;
#810413632; #371518772; #810420653; and #810540517
Material Weakness in Internal Control over Compliance – Activities Allowed or
Unallowed, Allowable Costs/Costs Principles, and Reporting; Material Noncompliance
- Reporting
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 selected Option i to calculate lost
revenue for the LHMC and NWH entities which consists of comparing actual quarterly
revenues in calendar years 2020, 2021, and 2022 to actual quarterly revenues in
calendar year 2019. Note that the revenue calculations also included AHS, NOSM, and
HC which were acquired by LHMC effective December 31, 2020.
Condition – In some of the quarters for certain entities, it was noted that bad debt
expenses were higher than revenues, creating a negative revenue for the quarter. As the
HHS reporting portal would not allow negative amounts to be entered, a zero was
entered into the HHS reporting portal. These negative amounts should have been offset
to other quarters or other revenue line items, but were not, which resulted in higher
revenue amounts being reported than the detailed reports supported.
Cause – The Corporation did not have adequate internal controls to ensure the lost
revenue calculation was done in accordance with terms and conditions of the grant.
Effect – Two of the entities included in the revenue calculation were impacted by this
issue and the impact was as follows:
Entity
Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported
in HHS Special Report
Excess Revenue
Reported
LHMC $ 1,810,255,440 $ 1,802,735,657 $ 7,519,783
Entity
Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported
in HHS Special Report
Excess Revenue
Reported
NWH 42,763,145 42,623,775 139,370
Period 3
Period 4
Questioned Costs – None reported. After recalculating the revenue by correcting the
above amounts, the amount of lost revenue still exceeded the amount of provider relief
funds retained.
Context/Sampling – Key line items were tested on the Period 3 and Period 4 Department
of Human Services (HHS) special report.
Repeat Findings from Prior Years – Yes, Finding #2022-003.
Recommendation – We recommend that the Corporation enhance internal controls to
ensure the revenue calculation is in compliance with the terms and conditions of the
grant. The HHS Hotline is available to assist with concerns with the HHS portal or the
calculations.
Views of Responsible Officials – Management agrees with the finding.
2023-004 U.S. 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 TIN #237293874, #810413632;
#371518772; #810420653; and #810540517
Material Weakness in Internal Control over Compliance – Activities Allowed or
Unallowed, Allowable Costs/Costs Principles, and Reporting; Material Noncompliance
- Reporting
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 selected Option i to calculate lost
revenue for LHMC which consists of comparing actual quarterly revenues in calendar
years 2020, 2021, and 2022 to actual quarterly revenues in calendar year 2019.
Condition – The operations of HC were consolidated into LHMC as of December 31,
2020. When LHMC calculated their lost revenues, they included HC’s revenue for 2020,
2021, and 2022 instead of only the 2021 and 2022 information. This resulted in LHMC
reporting higher lost revenues than the detailed reports supported in Period 3. LHMC
selected Option iii for Period 4 and amounts were properly updated.
Cause – The Corporation did not have adequate internal controls to ensure the lost
revenue calculation was done in accordance with the terms and conditions of the grant.
Effect – The impact of the above condition was as follows:
Entity
Lost Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported in
HHS Special Report
Excess Lost
Revenue
Reported
LHMC $ 26,318,146 $ 17,377,554 $ 8,940,592
Period 3
Questioned Costs – None reported. After recalculating the lost revenue, the amount still
exceeded the amount of provider relief funds retained.
Context/Sampling – Key line items were tested on the Period 3 HHS special report.
Repeat Findings from Prior Years – Yes, Finding #2022-004.
Recommendation – We recommend that the Corporation enhance internal controls to
ensure the lost revenue calculation is completed according to the terms and conditions.
Views of Responsible Officials – Management agrees with the finding.
2023-005 U.S. 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 TIN #237293874, #810540517;
#371518772; #810413632; #810420653; #810247969; #810530457; #810232406; and
#810515463
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.
2023-006 U.S. Department of Health and Human Services
All grant awards and pass-through entities
Federal Assistance Listing #93.391
Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department
Response to Public Health or Healthcare Crisis
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2023-005 due to requirement of the Federal Audit Clearinghouse)
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.
2023-006 U.S. Department of Health and Human Services
All grant awards and pass-through entities
Federal Assistance Listing #93.391
Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department
Response to Public Health or Healthcare Crisis
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2023-005 due to requirement of the Federal Audit Clearinghouse)
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.
2023-002 U.S. 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 #810515463
Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting
Significant Deficiency 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 COVID related incremental expenses. The
Corporation selected Option i and Option iii to calculate lost revenue (this varied based
on specific entity).
Condition – During our testing, we noted reviews were performed over individual
eligible expenditures; however, there was no formal review or approval of the
expenditure spreadsheet used to calculate the expenditures claimed for the federal
program outside of the preparer at the LH Chester location. In addition, there was no
evidence retained that the Corporation’s HHS Special Report submitted to the
Department of Health and Human Services for Period 4 was reviewed and approved by a
separate individual outside of the preparer at the LH Chester location.
Cause – The Corporation did not have an adequate internal control policy in place to
ensure review and approval over tracking of other funding sources, lost revenue, or
reporting was documented at all locations.
Effect – The lack of adequate policies governing review increases the risk that
employees participating in the federal award administration may not be able to detect
and correct noncompliance in a timely manner.
Questioned Costs – None reported.
Context/Sampling – Detail testing was performed over eligible expenditures for
activities allowed and unallowable and allowable cost/cost principles. There were nine
HHS Special Reports in the population and all were tested of which one did not have
documented evidence of proper review.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that the Corporation enhance internal control
policies to ensure that formal documentation of reviews is present at for all supporting
documentation and reports all locations.
Views of Responsible Officials – Management agrees with the finding.
2023-003 U.S. 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 #237293874;
#810413632; #371518772; #810420653; and #810540517
Material Weakness in Internal Control over Compliance – Activities Allowed or
Unallowed, Allowable Costs/Costs Principles, and Reporting; Material Noncompliance
- Reporting
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 selected Option i to calculate lost
revenue for the LHMC and NWH entities which consists of comparing actual quarterly
revenues in calendar years 2020, 2021, and 2022 to actual quarterly revenues in
calendar year 2019. Note that the revenue calculations also included AHS, NOSM, and
HC which were acquired by LHMC effective December 31, 2020.
Condition – In some of the quarters for certain entities, it was noted that bad debt
expenses were higher than revenues, creating a negative revenue for the quarter. As the
HHS reporting portal would not allow negative amounts to be entered, a zero was
entered into the HHS reporting portal. These negative amounts should have been offset
to other quarters or other revenue line items, but were not, which resulted in higher
revenue amounts being reported than the detailed reports supported.
Cause – The Corporation did not have adequate internal controls to ensure the lost
revenue calculation was done in accordance with terms and conditions of the grant.
Effect – Two of the entities included in the revenue calculation were impacted by this
issue and the impact was as follows:
Entity
Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported
in HHS Special Report
Excess Revenue
Reported
LHMC $ 1,810,255,440 $ 1,802,735,657 $ 7,519,783
Entity
Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported
in HHS Special Report
Excess Revenue
Reported
NWH 42,763,145 42,623,775 139,370
Period 3
Period 4
Questioned Costs – None reported. After recalculating the revenue by correcting the
above amounts, the amount of lost revenue still exceeded the amount of provider relief
funds retained.
Context/Sampling – Key line items were tested on the Period 3 and Period 4 Department
of Human Services (HHS) special report.
Repeat Findings from Prior Years – Yes, Finding #2022-003.
Recommendation – We recommend that the Corporation enhance internal controls to
ensure the revenue calculation is in compliance with the terms and conditions of the
grant. The HHS Hotline is available to assist with concerns with the HHS portal or the
calculations.
Views of Responsible Officials – Management agrees with the finding.
2023-004 U.S. 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 TIN #237293874, #810413632;
#371518772; #810420653; and #810540517
Material Weakness in Internal Control over Compliance – Activities Allowed or
Unallowed, Allowable Costs/Costs Principles, and Reporting; Material Noncompliance
- Reporting
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 selected Option i to calculate lost
revenue for LHMC which consists of comparing actual quarterly revenues in calendar
years 2020, 2021, and 2022 to actual quarterly revenues in calendar year 2019.
Condition – The operations of HC were consolidated into LHMC as of December 31,
2020. When LHMC calculated their lost revenues, they included HC’s revenue for 2020,
2021, and 2022 instead of only the 2021 and 2022 information. This resulted in LHMC
reporting higher lost revenues than the detailed reports supported in Period 3. LHMC
selected Option iii for Period 4 and amounts were properly updated.
Cause – The Corporation did not have adequate internal controls to ensure the lost
revenue calculation was done in accordance with the terms and conditions of the grant.
Effect – The impact of the above condition was as follows:
Entity
Lost Revenue Amount
Reported in HHS
Special Report
Amounts that Should
Have Been Reported in
HHS Special Report
Excess Lost
Revenue
Reported
LHMC $ 26,318,146 $ 17,377,554 $ 8,940,592
Period 3
Questioned Costs – None reported. After recalculating the lost revenue, the amount still
exceeded the amount of provider relief funds retained.
Context/Sampling – Key line items were tested on the Period 3 HHS special report.
Repeat Findings from Prior Years – Yes, Finding #2022-004.
Recommendation – We recommend that the Corporation enhance internal controls to
ensure the lost revenue calculation is completed according to the terms and conditions.
Views of Responsible Officials – Management agrees with the finding.
2023-005 U.S. 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 TIN #237293874, #810540517;
#371518772; #810413632; #810420653; #810247969; #810530457; #810232406; and
#810515463
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.
2023-006 U.S. Department of Health and Human Services
All grant awards and pass-through entities
Federal Assistance Listing #93.391
Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department
Response to Public Health or Healthcare Crisis
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2023-005 due to requirement of the Federal Audit Clearinghouse)
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.
2023-006 U.S. Department of Health and Human Services
All grant awards and pass-through entities
Federal Assistance Listing #93.391
Activities to Support State, Tribal, Local, and Territorial (STLT) Health Department
Response to Public Health or Healthcare Crisis
Preparation of Consolidated Schedule of Expenditures of Federal Awards
Material Weakness in Internal Control over Compliance – Other
(Repeat of 2023-005 due to requirement of the Federal Audit Clearinghouse)
Criteria – A good system of internal accounting control contemplates an adequate
system for preparing the consolidated schedule of expenditures of federal awards
(Schedule) and accompanying notes to the Schedule.
Condition – During the course of our engagement, we noted a material program missing
from the Schedule that was not identified by management, until completing the
subsequent period audit for the nine-months ended December 31, 2023.
Cause – Management’s process for identifying all grant to be included in the Schedule
did not include sufficient procedures to address completeness of the population of
grants across all entities, which resulted in certain grants being missed, including a
major program.
Effect – This control deficiency resulted in us having to assist in the preparation of the
Schedule and would have resulted in a material misstatement to the Schedule that was
not prevented, or detected and corrected, by internal personnel in a timely manner.
This control deficiency also resulted in a reissuance of the Federal Awards Report in
accordance with the Uniform Guidance for the year ended March 31, 2023.
Questioned Costs – None reported.
Context/Sampling – Sampling was not used.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that management update procedures and controls
over tracking and recording of federal programs within the Schedule.
Views of Responsible Officials – Management agrees with the finding.