FAC Explorer

Audit 39259

FY End
2022-12-31
Total Expended
$2.69M
Findings
2
Programs
2
Organization: Southwest Health System, Inc. (CO)
Year: 2022 Accepted: 2023-08-01
Auditor: Blue and CO LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42025 2022-002 Material Weakness - L
618467 2022-002 Material Weakness - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $2.29M Yes 1
93.697 Covid-19 Testing for Rural Health Clinics $400,000 - 0

Contacts

Name Title Type
H1VWFAYUALA3 Shelle Diehm Auditee
9705642145 Steve Jones Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of Southwest Health System, Inc. (the Health System) under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with 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). Because the schedule presents only a selected portion of the operations of the Health System it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Health System.
Title: Provider Relief Funds Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures reported on the Schedule for the Provider Relief Fund (PRF) under CFDA Number 93.498 are based on the Health Systems December 31, 2022 report to the PRF Reporting Portal. Under terms and conditions of the Provider Relief Funds established by the Coronavirus Aids, Relief, and Economic Security (CARES) Act, the Health System is required to report COVID-19 related expenses and lost revenue to the U.S. Department of Health and Human Services (HHS). Guidance from HHS has required the reporting of the COVID-19 related expenses and lost revenue within certain reporting timetables based on the date that funds were received. For the years ended December 31, 2022 and 2021, the Health System recognized $-0- and $2,876,597, respectively, as provider relief fund revenue in the statements of operations and changes in net assets as the terms and conditions of the PRF grant were satisfied by the Health System. The 2022 Schedule includes PRF of $2,291,308 which was received by the Health System from January 1, 2021 to December 31, 2021, the dates designated by HHS for its third and fourth PRF reporting periods.
Title: DONATED PERSONAL PROTECTIVE EQUIPMENT (UNAUDITED) Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures 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. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During 2022, the Health System did not receive material donated personal protective equipment from federal sources.

Finding Details

Finding 2022-002
MATERIAL WEAKNESS Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 ? COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 2022-002: Reporting of Lost Revenues Attributable to Coronavirus Compliance Requirement(s): Reporting Criteria: Reporting requirements stipulate that when submitting information related to lost revenues attributable to coronavirus on the Health Resources and Services Administration (?HRSA?) Provider Relief Funding reporting portal, patient service revenues must be entered on a quarterly basis from the first quarter of 2019 through the fourth quarter of 2022. Condition ? During our testing of the underlying information supporting lost revenue reported by the Health System, we noted two years where patient service revenue per the filing did not reconcile to the audited financial statements. Cause ? The cause of this deficiency is due to the lack of internal controls to ensure proper reporting of lost revenues on the reporting portal. Effect ? The effect is misstatement of quarterly and annual revenues for 2022 and 2021 reported to HRSA on the reporting portal. Recommendation ? We recommend that the Health System implement internal control procedures to ensure proper reporting on the HRSA reporting portal in future reporting periods. Management?s Response ? We will implement internal control procedures to ensure proper reporting of lost revenues, as is required under the reporting guidelines stipulated by HRSA, in future reporting periods.
Finding 2022-002
MATERIAL WEAKNESS Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 ? COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 2022-002: Reporting of Lost Revenues Attributable to Coronavirus Compliance Requirement(s): Reporting Criteria: Reporting requirements stipulate that when submitting information related to lost revenues attributable to coronavirus on the Health Resources and Services Administration (?HRSA?) Provider Relief Funding reporting portal, patient service revenues must be entered on a quarterly basis from the first quarter of 2019 through the fourth quarter of 2022. Condition ? During our testing of the underlying information supporting lost revenue reported by the Health System, we noted two years where patient service revenue per the filing did not reconcile to the audited financial statements. Cause ? The cause of this deficiency is due to the lack of internal controls to ensure proper reporting of lost revenues on the reporting portal. Effect ? The effect is misstatement of quarterly and annual revenues for 2022 and 2021 reported to HRSA on the reporting portal. Recommendation ? We recommend that the Health System implement internal control procedures to ensure proper reporting on the HRSA reporting portal in future reporting periods. Management?s Response ? We will implement internal control procedures to ensure proper reporting of lost revenues, as is required under the reporting guidelines stipulated by HRSA, in future reporting periods.