Audit 39555

FY End
2022-06-30
Total Expended
$191.42M
Findings
2
Programs
11
Year: 2022 Accepted: 2023-03-30
Auditor: Ernst and Young

Organization Exclusion Status:

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Contacts

Name Title Type
FJSZQCLDKTQ5 Jeff Chadwick Auditee
4436106385 Tom Sand Auditor
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Notes to SEFA

Title: Covid-19 - Provider Relief Fund Accounting Policies: 1. Basis of PresentationThe accompanying schedule of expenditures of federal awards (the Schedule) includes federal grant activity of the University of Maryland Medical System Corporation and Subsidiaries (the Corporation) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and 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 (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the Corporations consolidated financial statements.The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule of expenditures of federal awards during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: 2. Indirect Cost RateDirect and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, the Corporation did not make this election in the accompanying Schedule. In accordance with the U.S. Department of Health and Human Services requirements specific to Federal Assistance Listing Number 93.498, COVID 19 Provider Relief Fund, the amount presented on the accompanying Schedule for the year ended June 30, 2022 for Federal Assistance Listing No. 93.498 relates to (i) Provider Relief Fund (PRF) payments received from July 1, 2020 through June 30, 2021 and (ii) used for PRF-eligible activity from the period January 1, 2020 through June 30, 2022. This payment receipt period and activity period and the resulting amount presented on the accompanying Schedule for the year ended June 30, 2022 reconciles to the PRF 3. COVID 19 Provider Relief Fund (continued)information reported to the Health Resources and Services Administration (HRSA) for PRF Reporting Period 2 and 3 as follows:Name of Reporting Entity for HRSA Reporting Periods 2 and 3 Reporting Entity Tax Identification Number (TIN)Type of DistributionTotal Other Provider Relief Fund Expenses ReportedTotal Lost Revenues ReportedTotal PRF Expenditures (Not Including Carryover) University of Maryland Medical System 52-1362793General/Targeted$1,346,846$306,418,546$57,762,969Upper Chesapeake Medical Center, Inc. 52-1253920Targeted7,900,0007,900,000University of Maryland St. Joseph Medical Center 35-2445106Targeted8,800,0008,800,000Chester River Hospital Center, Inc. 52-0679694Targeted5,246,8421,100,000Baltimore Washington Medical Center, Inc.52-0689917Targeted20,300,00011,293,834Dimensions Health Corporation52-1289729Targeted68,006,37159,692,988UM Charles Regional Medical Center52-0445374Targeted9,050,0009,050,000$1,346,846$425,721,759$155,599,791Health and Human Services (HHS) has indicated the PRF Funds should be reported according to reporting requirements of the HRSA PRF Reporting Portal (the 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 Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability). The Schedule includes $155,599,791 of PRF Funds received from HHS between July 1, 2020 through June 30, 2021, respectively. The PRF-eligible expenses attributable to Coronavirus Disease 2019 (COVID 19) and lost revenues incurred by the Corporation during the period of availability for PRF Reporting Periods 2 and 3 (January 1, 2020 through June 30, 2022) are in excess of the general and targeted distributions received from July 1, 2020 through June 30, 2021 and, therefore, the amounts presented in the table above and on the accompanying Schedule are limited to the amount of such distributions. The Corporation also received PRF payments subsequent to June 30, 2021, which are required to be reported in subsequent HRSA PRF Reporting Periods and, accordingly, pursuant to the requirements specific to Federal Assistance Listing Number 93.498, activity related to such payments is excluded from the accompanying Schedule.
Title: Noncash Federal Assistance Accounting Policies: 1. Basis of PresentationThe accompanying schedule of expenditures of federal awards (the Schedule) includes federal grant activity of the University of Maryland Medical System Corporation and Subsidiaries (the Corporation) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and 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 (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the Corporations consolidated financial statements.The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule of expenditures of federal awards during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: 2. Indirect Cost RateDirect and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, the Corporation did not make this election in the accompanying Schedule. The Corporation did not receive any noncash Federal assistance including donated personal protective equipment for the year ended June 30, 2022.

Finding Details

Section III ? Federal Award Findings and Questioned Costs Finding Reference: 2022-001 ? I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing Number 21.027 ? COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Periods: March 17, 2022 ? Ongoing Description: Incomplete Federal Requirements within Procurement Policies Type of Finding: Deficiency in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, ?The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Part 200.320 Methods of procurement to be followed states the following: ?The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319" regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for Coronavirus State and Local Fiscal Recovery Funds, we noted that the Corporation did not have a procurement policy that conforms to all applicable Federal law, State and Local Fiscal Recovery Funds Regulations, and the standards contained in the Uniform Guidance, as applicable, when purchasing services with the Coronavirus State and Local Fiscal Recovery Funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to the Coronavirus State and Local Fiscal Recovery Funds program. Effect or potential effect Purchasing of goods and/or servicing with the State and Local Fiscal Recovery Funds may not be in compliance with the Uniform Guidance. Questioned costs Not applicable. Identification of a repeat finding This is not a repeat finding. Context The Corporation utilized the funds awarded to their facility to bolster staff and entered into various labor contracts with agency vendors. As a result of the pandemic and related public emergency, there was an unprecedented stress on the labor force and therefore, a high demand and dependency on agency labor. As part of management?s assessment, a competitive solicitation would have resulted in a delay and lack of required and necessary staff. As such, this specific circumstance would allow for noncompetitive procurement. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials The Corporation agrees with the finding and has developed a plan to correct the finding.
Section III ? Federal Award Findings and Questioned Costs Finding Reference: 2022-001 ? I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing Number 21.027 ? COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Award Periods: March 17, 2022 ? Ongoing Description: Incomplete Federal Requirements within Procurement Policies Type of Finding: Deficiency in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, ?The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Part 200.320 Methods of procurement to be followed states the following: ?The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319" regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for Coronavirus State and Local Fiscal Recovery Funds, we noted that the Corporation did not have a procurement policy that conforms to all applicable Federal law, State and Local Fiscal Recovery Funds Regulations, and the standards contained in the Uniform Guidance, as applicable, when purchasing services with the Coronavirus State and Local Fiscal Recovery Funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to the Coronavirus State and Local Fiscal Recovery Funds program. Effect or potential effect Purchasing of goods and/or servicing with the State and Local Fiscal Recovery Funds may not be in compliance with the Uniform Guidance. Questioned costs Not applicable. Identification of a repeat finding This is not a repeat finding. Context The Corporation utilized the funds awarded to their facility to bolster staff and entered into various labor contracts with agency vendors. As a result of the pandemic and related public emergency, there was an unprecedented stress on the labor force and therefore, a high demand and dependency on agency labor. As part of management?s assessment, a competitive solicitation would have resulted in a delay and lack of required and necessary staff. As such, this specific circumstance would allow for noncompetitive procurement. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials The Corporation agrees with the finding and has developed a plan to correct the finding.