FAC Explorer

Audit 39059

FY End
2022-03-31
Total Expended
$765,186
Findings
4
Programs
1
Organization: The Estaugh T/a Medford Leas (NJ)
Year: 2022 Accepted: 2023-01-12
Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
43558 2022-001 Significant Deficiency - L
43559 2022-002 Significant Deficiency - A
620000 2022-001 Significant Deficiency - L
620001 2022-002 Significant Deficiency - A

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $765,186 Yes 2

Contacts

Name Title Type
FS2AVKD6LJJ6 Abby Loftus Auditee
6096543005 Patrick Heavens Auditor
No contacts on file

Notes to SEFA

Title: General Accounting Policies: 2.Summary of Significant Accounting Policies Basis of Presentation The accompanying Schedule of Revenue of HHS Award (the Schedule) is prepared in accordance with accounting principles generally accepted in the United States of America and 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).The Schedule includes revenue of the HHS Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program of the Company for the periods of availability which ended in the year ended March 31, 2022. Because the Schedule presents only a selected portion of the Company's revenue, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Company. Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution - Assistance Listing Number 93.498 For the HHS awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the HRSA PRF Reporting 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 HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end of the Period of Availability). The Schedule includes $765,186 received from HHS between April 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 1 and 2. Such amounts were recognized as COVID-19 grant revenue in the Company's financial statements as shown in the Schedule in the years ended March 31, 2021. The Schedule includes the following entity that received the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program:Legal Entity NameTax Identification NumberThe Estaugh T/A Medford Leas210633410 De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Estaugh T/A Medford Leas (the Company), a not-for-profit corporation, whose governing body includes Members of the Religious Society of Friends (Quakers), is a continuing care retirement community providing housing, health care and other related services to older adults through the operation of 394 independent living apartments, 119 comprehensive personal care apartments and a 24-bed skilled nursing facility. The Community is located in Medford, New Jersey and Lumberton, New Jersey. Federal funds were received in an award from the U.S. Department of Health and Human Services (HHS), including through federal programs established by legislation issued in response to the COVID-19 pandemic (e.g., Coronavirus Aid, Relief, and Economic Security (CARES) Act or the American Rescue Plan (ARP)).
Title: Subsequent Events Accounting Policies: 2.Summary of Significant Accounting Policies Basis of Presentation The accompanying Schedule of Revenue of HHS Award (the Schedule) is prepared in accordance with accounting principles generally accepted in the United States of America and 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).The Schedule includes revenue of the HHS Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program of the Company for the periods of availability which ended in the year ended March 31, 2022. Because the Schedule presents only a selected portion of the Company's revenue, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Company. Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution - Assistance Listing Number 93.498 For the HHS awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the HRSA PRF Reporting 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 HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end of the Period of Availability). The Schedule includes $765,186 received from HHS between April 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 1 and 2. Such amounts were recognized as COVID-19 grant revenue in the Company's financial statements as shown in the Schedule in the years ended March 31, 2021. The Schedule includes the following entity that received the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program:Legal Entity NameTax Identification NumberThe Estaugh T/A Medford Leas210633410 De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. 4.Subsequent EventsThe Schedule and related disclosures include evaluation of events through December 21, 2022, the date the Schedule was available to be issued.

Finding Details

Finding 2022-001
Finding 2022-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing Number: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not Applicable Award Number/Year: Not Applicable / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Condition/Context: For the reports tested, the Company excluded from patient care revenue the amount attributable to independent living and assisted living related services provided to residents. The Company also inadvertently used data from the wrong period when preparing the lost revenue calculation. As a result of these adjustments, the lost revenue increased from $970,102 to $1,977,744. Additionally, the reports tested did not contain a documented review and approval of the reports prior to submission. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with the established HHS Reporting Requirements. Questioned Costs: None reported. Cause: An oversight by management resulted in using data from the wrong period when preparing their lost revenue calculation. In addition, management believed that the most appropriate option to select was Option i, not Option iii, based on their interpretation of the guidance. Recommendation: We recommend that management review and update, as needed, their procedure for completion of the reporting to ensure that a review and approval of such reporting is completed and documented prior to submission. Additionally, we recommend that management change their selected reporting option from Option i to Option iii in the next required submission, if revenue attributable to independent living related services will continue to be excluded from patient care revenues. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is responsible for reporting will remain current on compliance requirements and review final reports and the related inputs prior to submission. Specifically, the Company will verify Residential Living (IL) revenues and Amortization Income are included in the lost revenue calculation.
Finding 2022-002
Finding 2022-002 - Significant Deficiency in Internal Control - Activities Allowed and Unallowed; Allowable Costs/Cost Principles Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Agency: Not applicable Award Number/Year: N/A / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Provider Relief Fund (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by HHS. Activities allowed have been defined as health care related expenses used to prevent, prepare for, and respond to coronavirus or lost revenues that are attributable to coronavirus. Condition/Context: A sample of 40 items were selected for testing. During our testing, we noted one item selected for testing that was deemed an unallowable expense as it was not used to prevent, prepare for, and respond to coronavirus. This was not a statistically valid sample. Effect: There were costs charged to the program that were for unallowable purposes. Questioned Costs: $40,323 related to the items that were not clearly identified as being used to prevent, prepare for, or respond to coronavirus, and the invoice that did not contain any supporting documentation. Cause: The Company lacked formal approved policies and procedures related to the administration of the award. Recommendation: We recommend that management develop and implement formal policies and procedures for administration of the federal award program that includes assigning an individual with the appropriate skills, knowledge, and expertise of the award to review and approve expenditures prior to being allocated to the program. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is reviewing and approving invoices has the appropriate skill set to ensure costs that are incurred are being used to prevent, prepare for, or respond to the coronavirus.
Finding 2022-001
Finding 2022-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing Number: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not Applicable Award Number/Year: Not Applicable / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Condition/Context: For the reports tested, the Company excluded from patient care revenue the amount attributable to independent living and assisted living related services provided to residents. The Company also inadvertently used data from the wrong period when preparing the lost revenue calculation. As a result of these adjustments, the lost revenue increased from $970,102 to $1,977,744. Additionally, the reports tested did not contain a documented review and approval of the reports prior to submission. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with the established HHS Reporting Requirements. Questioned Costs: None reported. Cause: An oversight by management resulted in using data from the wrong period when preparing their lost revenue calculation. In addition, management believed that the most appropriate option to select was Option i, not Option iii, based on their interpretation of the guidance. Recommendation: We recommend that management review and update, as needed, their procedure for completion of the reporting to ensure that a review and approval of such reporting is completed and documented prior to submission. Additionally, we recommend that management change their selected reporting option from Option i to Option iii in the next required submission, if revenue attributable to independent living related services will continue to be excluded from patient care revenues. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is responsible for reporting will remain current on compliance requirements and review final reports and the related inputs prior to submission. Specifically, the Company will verify Residential Living (IL) revenues and Amortization Income are included in the lost revenue calculation.
Finding 2022-002
Finding 2022-002 - Significant Deficiency in Internal Control - Activities Allowed and Unallowed; Allowable Costs/Cost Principles Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Agency: Not applicable Award Number/Year: N/A / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Provider Relief Fund (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by HHS. Activities allowed have been defined as health care related expenses used to prevent, prepare for, and respond to coronavirus or lost revenues that are attributable to coronavirus. Condition/Context: A sample of 40 items were selected for testing. During our testing, we noted one item selected for testing that was deemed an unallowable expense as it was not used to prevent, prepare for, and respond to coronavirus. This was not a statistically valid sample. Effect: There were costs charged to the program that were for unallowable purposes. Questioned Costs: $40,323 related to the items that were not clearly identified as being used to prevent, prepare for, or respond to coronavirus, and the invoice that did not contain any supporting documentation. Cause: The Company lacked formal approved policies and procedures related to the administration of the award. Recommendation: We recommend that management develop and implement formal policies and procedures for administration of the federal award program that includes assigning an individual with the appropriate skills, knowledge, and expertise of the award to review and approve expenditures prior to being allocated to the program. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is reviewing and approving invoices has the appropriate skill set to ensure costs that are incurred are being used to prevent, prepare for, or respond to the coronavirus.