FAC Explorer

Audit 41344

FY End
2022-06-30
Total Expended
$11.29M
Findings
2
Programs
3
Organization: Caromont Health, Inc. (NC)
Year: 2022 Accepted: 2023-03-21
Auditor: Forvis LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
46184 2022-001 Material Weakness - ABL
622626 2022-001 Material Weakness - ABL

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $9.96M Yes 1
93.461 Covid-19 Testing for the Uninsured $1.20M Yes 0
32.006 Covid-19 Telehealth Program $130,083 - 0

Contacts

Name Title Type
SMJ9XFKZ4J85 Sharilyn Reese Auditee
7048342168 Greg Taylor Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in 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 (SEFA) includes the federal award activity of CaroMont Health, Inc. and Affiliates (the System) under the programs of the federal government for the year ended June 30, 2022. The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly and indirectly from federal agencies are included in this SEFA. Because the SEFA presents only a selected portion of the operations of the System, it is not intended to and does not present the financial position, changes in net position or cash flows of the System.
Title: Basis of Accounting Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in 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 in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.As outlined in the April 2022 OMB Compliance Supplement, the amounts reported in the accompanying SEFA related to the Provider Relief Fund (PRF), Assistance Listing No. 93.498, are reported based upon the PRF reporting portal submission guidelines established by the Health Resource and Service Administration (HRSA). Five separate reporting periods were established by HRSA based on the dates of receipt of PRF payments. Each reporting period has a specific period of availability which begins on January 1, 2020 and extends through specified deadlines, as indicated below: The accompanying SEFA includes those qualifying lost revenues and expenses that were reported in the HRSA PRF portal for Period 2 and Period 3. The total amount of $9,962,279 in PRF payments was recognized by the System as nonoperating revenues during the fiscal year ended June 30, 2021. The System has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Contingencies Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in 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 Systems federal programs are subject to financial and compliance audits by grantor agencies which, if instances of material noncompliance are found, may result in disallowed expenditures and affect the Systems continued participation in specific programs. The amount if any, of expenditures which may be disallowed by the grantor agencies cannot be determined at this time, although the System expects such amounts, if any, to be immaterial.
Title: Subrecipients Accounting Policies: Expenditures reported in the SEFA are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in 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 System had no subrecipients.

Finding Details

Finding 2022-001
Finding 2022-001 Allowable Costs, Activities Allowed and Reporting 93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions Material Weakness and Material Noncompliance Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions. Those terms and conditions outlined the usages of the PRF distributions received, specifically related to expenses, and lost revenues. PRF distributions should only be used for expenses to prevent, prepare for and respond to the coronavirus that have not been reimbursed by other sources or that other sources are not obligated to reimburse and calculate lost revenues as outlined in the terms and conditions. Management should have effectively designed controls in place to prevent or detect and correct noncompliance. Condition: The System submitted lost revenues through the Department of Health and Human Services PRF portal for the second period of availability in which the lost revenue calculations were overstating the lost revenues between two separate portal submissions. Lost revenues were reported on a consolidated basis for the parent portal submission and included subsidiary lost revenues that were also included on a separate subsidiary portal submission, therefore overstating lost revenues on the parent portal submission. Context: During testing of period 2 reporting, we noted lost revenues were included both at the parent level and subsidiary level resulting in an overstatement of lost revenues. Questioned Costs: N/A Effect: Management failed to prevent, or detect and correct, noncompliance such that the System overstated lost revenues under the terms and conditions of the program. Cause: Lack of effectively designed and implemented controls, including oversight and detail review of the portal submission through the Department of Health and Human Services PRF portal for the second period of availability. Identification as a repeat finding: N/A Auditors? Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure lost revenues submitted through the Department of Health and Human Services PRF portal meet the criteria established in the terms and conditions and there is not a reasonable possibility that the schedule could be materially misstated. Management Response: See corrective action plan.
Finding 2022-001
Finding 2022-001 Allowable Costs, Activities Allowed and Reporting 93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions Material Weakness and Material Noncompliance Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions. Those terms and conditions outlined the usages of the PRF distributions received, specifically related to expenses, and lost revenues. PRF distributions should only be used for expenses to prevent, prepare for and respond to the coronavirus that have not been reimbursed by other sources or that other sources are not obligated to reimburse and calculate lost revenues as outlined in the terms and conditions. Management should have effectively designed controls in place to prevent or detect and correct noncompliance. Condition: The System submitted lost revenues through the Department of Health and Human Services PRF portal for the second period of availability in which the lost revenue calculations were overstating the lost revenues between two separate portal submissions. Lost revenues were reported on a consolidated basis for the parent portal submission and included subsidiary lost revenues that were also included on a separate subsidiary portal submission, therefore overstating lost revenues on the parent portal submission. Context: During testing of period 2 reporting, we noted lost revenues were included both at the parent level and subsidiary level resulting in an overstatement of lost revenues. Questioned Costs: N/A Effect: Management failed to prevent, or detect and correct, noncompliance such that the System overstated lost revenues under the terms and conditions of the program. Cause: Lack of effectively designed and implemented controls, including oversight and detail review of the portal submission through the Department of Health and Human Services PRF portal for the second period of availability. Identification as a repeat finding: N/A Auditors? Recommendation: Effective controls over compliance and financial reporting should be implemented to ensure lost revenues submitted through the Department of Health and Human Services PRF portal meet the criteria established in the terms and conditions and there is not a reasonable possibility that the schedule could be materially misstated. Management Response: See corrective action plan.