FAC Explorer

Audit 32577

FY End
2022-03-31
Total Expended
$4.42M
Findings
2
Programs
4
Organization: South Lyon Health Center, INC (NV)
Year: 2022 Accepted: 2022-12-15
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
35125 2022-003 - - A
611567 2022-003 - - A

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $4.18M Yes 1
93.697 Covid-19 Testing for Rural Health Clinics $135,588 - 0
93.301 Small Rural Hospital Improvement Grant Program $84,029 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $19,448 - 0

Contacts

Name Title Type
M278B67VKB85 David Bezard Auditee
7754636402 Jeff Johnson Auditor
No contacts on file

Notes to SEFA

Title: Note 1: Basis of Presentation Accounting Policies: Note 2: Summary of Significant Accounting Policies With the exception of expenditures related to the Provider Relief Fund (PRF), expenditures on the Schedule are reported on the accrual basis of accounting and are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the reporting period 1 and reporting period 2. De Minimis Rate Used: N Rate Explanation: Note 3: Indirect Cost The Medical Center has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance on Provider Relief Funds. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of South Lyon Medical Center (the Medical Center). The information in the Schedule is presented 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 (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Medical Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Medical Center.
Title: Note 4: Subrecipients Accounting Policies: Note 2: Summary of Significant Accounting Policies With the exception of expenditures related to the Provider Relief Fund (PRF), expenditures on the Schedule are reported on the accrual basis of accounting and are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the reporting period 1 and reporting period 2. De Minimis Rate Used: N Rate Explanation: Note 3: Indirect Cost The Medical Center has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance on Provider Relief Funds. The Medical Center passed no federal awards through to subrecipients.
Title: Note 5: Interest Earned on Provider Relief Funds Accounting Policies: Note 2: Summary of Significant Accounting Policies With the exception of expenditures related to the Provider Relief Fund (PRF), expenditures on the Schedule are reported on the accrual basis of accounting and are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the reporting period 1 and reporting period 2. De Minimis Rate Used: N Rate Explanation: Note 3: Indirect Cost The Medical Center has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance on Provider Relief Funds. PRF reported on the Schedule included $4,968 of interest earned on PRF proceeds and used for allowable purposes.

Finding Details

Finding 2022-003
Finding 2022.003 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance Compliance Requirement: Allowable Costs Questioned Costs: $1,226,613 Condition: In Provider Relief Fund reporting period 1, the Medical Center reported expenditures of $1,226,613 related to a HVAC capital project that was not yet complete and placed into service by the end of the period of availability, June 30, 2021. Criteria: The Provider Relief Fund Frequently Asked Questions (FAQs) state ?For projects that are a bundle of services and purchases of tangible items that cannot be separated, such as capital projects, construction projects, or alteration and renovation projects, the project costs cannot be reimbursed using Provider Relief Fund payments unless the project was fully completed by the end of Period of Availability associated with the Payment Received Period.? This language was added to the FAQs after the end of the period 1 period of availability, on August 30, 2021. Context: During the audit, it was determined that one HVAC capital project tested using Provider Relief Funds was not completed within the period of availability. Cause: The Provider Relief Fund Post-Payment Notice of Reporting Requirements state that updates to HVAC systems are an allowable use of the funds. The Medical Center entered into an agreement with a contractor on May 5, 2021, but the project was not fully completed by the end of the Period of Availability as required by the Provider Relief Fund FAQs. Effect: Expenditures were claimed in reporting period 1 for a capital project that was not complete by the end of the Period of Availability, resulting in a reportable finding. Recommendation: Management should implement procedures to ensure grant funds are expended as needed for allowable costs during the applicable periods of availability. View of Responsible Officials The Medical Center entered into an agreement on May 5, 2021 for an HVAC update, which is an allowable cost per the Post-Payment Notice of Reporting Requirements. The FAQs available at the time the contract was executed did not include a requirement that the capital project be fully complete by the end of the Period of Availability to be allowable. This requirement was added on August 30, 2021, which is two months after the end of the period 1 Period of Availability, June 30, 2021. HVAC projects at hospitals require a significant amount of time to plan, design, and build under normal circumstances, even before taking into consideration complications added by the pandemic, which included contractor shortages, labor availability issues, and supply chain issues. The Medical Center in good faith entered into the contract, and committed funds to the project, using the guidance available at the time of the commitment. The project was part of the Medical Center?s initiative to prevent, prepare for, and respond to coronavirus and, accordingly, the Provider Relief Fund grants were used to help fund the initiative.
Finding 2022-003
Finding 2022.003 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance Compliance Requirement: Allowable Costs Questioned Costs: $1,226,613 Condition: In Provider Relief Fund reporting period 1, the Medical Center reported expenditures of $1,226,613 related to a HVAC capital project that was not yet complete and placed into service by the end of the period of availability, June 30, 2021. Criteria: The Provider Relief Fund Frequently Asked Questions (FAQs) state ?For projects that are a bundle of services and purchases of tangible items that cannot be separated, such as capital projects, construction projects, or alteration and renovation projects, the project costs cannot be reimbursed using Provider Relief Fund payments unless the project was fully completed by the end of Period of Availability associated with the Payment Received Period.? This language was added to the FAQs after the end of the period 1 period of availability, on August 30, 2021. Context: During the audit, it was determined that one HVAC capital project tested using Provider Relief Funds was not completed within the period of availability. Cause: The Provider Relief Fund Post-Payment Notice of Reporting Requirements state that updates to HVAC systems are an allowable use of the funds. The Medical Center entered into an agreement with a contractor on May 5, 2021, but the project was not fully completed by the end of the Period of Availability as required by the Provider Relief Fund FAQs. Effect: Expenditures were claimed in reporting period 1 for a capital project that was not complete by the end of the Period of Availability, resulting in a reportable finding. Recommendation: Management should implement procedures to ensure grant funds are expended as needed for allowable costs during the applicable periods of availability. View of Responsible Officials The Medical Center entered into an agreement on May 5, 2021 for an HVAC update, which is an allowable cost per the Post-Payment Notice of Reporting Requirements. The FAQs available at the time the contract was executed did not include a requirement that the capital project be fully complete by the end of the Period of Availability to be allowable. This requirement was added on August 30, 2021, which is two months after the end of the period 1 Period of Availability, June 30, 2021. HVAC projects at hospitals require a significant amount of time to plan, design, and build under normal circumstances, even before taking into consideration complications added by the pandemic, which included contractor shortages, labor availability issues, and supply chain issues. The Medical Center in good faith entered into the contract, and committed funds to the project, using the guidance available at the time of the commitment. The project was part of the Medical Center?s initiative to prevent, prepare for, and respond to coronavirus and, accordingly, the Provider Relief Fund grants were used to help fund the initiative.