Audit 43607

FY End
2022-06-30
Total Expended
$18.68M
Findings
4
Programs
4
Organization: Excela Health and Subsidiaries (PA)
Year: 2022 Accepted: 2023-03-30

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
49997 2022-001 Significant Deficiency Yes L
49998 2022-001 Significant Deficiency Yes L
626439 2022-001 Significant Deficiency Yes L
626440 2022-001 Significant Deficiency Yes L

Contacts

Name Title Type
NPBZU7JUCLH3 Allison Lutz, Cpa, Mba, Cma Auditee
7248324016 Debra Bowes, CPA 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. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Organization did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Excela Health and Subsidiaries (collectively, the Organization) for the year ended June 30, 2022. 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 (Uniform Guidance). Therefore, some amounts may differ from amounts presented in, or used in the preparation of the consolidated financial statements. Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization.
Title: Provider Relief Funding and American Rescue Plan (ARP) Rural Distribution 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. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Organization did not elect to use the 10% de minimis indirect cost rate allowed under Uniform Guidance. For the U.S. Department of Health and Human Services (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 Health Resources and Services Administration (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 $18,535,641 received from HHS between July 1, 2020 through June 30, 2021. In accordance with guidance from HHS, these amounts are presented as Period 2 and Period 3, as follows: Period Received, Date Range, Received, Deadline to Use Funds, Period 2, 07/01/2020-12/31/2020, $1,301,610, December 31, 2021, Period 3, 01/01/2021-06/30/2021, $17,234,031, June 30, 2022. (See Notes to SEFA for chart/table). Such amounts were recognized as a component of COVID-19 grant income in the Organization's consolidated statement of operations and changes in net assets during the years ended June 30, 2021 and 2020. Due to the PRF Reporting requirements, these amounts are not the total PRF received and/or recognized as COVID-19 grant income in the year presented in the Schedule. The Schedule includes the following entities that received the PRF funds: Legal Entity Name, Tax Identification Number, Westmoreland Regional Hospital, 25-0965612, Latrobe Area Hospital, 25-0965414, Frick Hospital & Community Health Center, 25-0965375, Excela Health Physician Practices, 25-1744392. (See Notes to SEFA for chart/table).

Finding Details

2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: Not determinable Repeat Finding 2021-001 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 also 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. Condition and Context: The Organization did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Organization inadvertently excluded certain value-based incentive payments in its reporting of total revenue/net charges from patient care for all quarters presented. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $44,218,904 to $43,347,174 on total distributions of PRF funding of $19,837,251. Effect: The amounts reported to Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to exclusion of certain value-based incentive payments in all quarters presented. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. View of Responsible Officials: Management concurs with the finding and anticipates updating this information with its Period 4 reporting.
2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: Not determinable Repeat Finding 2021-001 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 also 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. Condition and Context: The Organization did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Organization inadvertently excluded certain value-based incentive payments in its reporting of total revenue/net charges from patient care for all quarters presented. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $44,218,904 to $43,347,174 on total distributions of PRF funding of $19,837,251. Effect: The amounts reported to Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to exclusion of certain value-based incentive payments in all quarters presented. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. View of Responsible Officials: Management concurs with the finding and anticipates updating this information with its Period 4 reporting.
2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: Not determinable Repeat Finding 2021-001 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 also 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. Condition and Context: The Organization did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Organization inadvertently excluded certain value-based incentive payments in its reporting of total revenue/net charges from patient care for all quarters presented. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $44,218,904 to $43,347,174 on total distributions of PRF funding of $19,837,251. Effect: The amounts reported to Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to exclusion of certain value-based incentive payments in all quarters presented. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. View of Responsible Officials: Management concurs with the finding and anticipates updating this information with its Period 4 reporting.
2022-001: Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022 Compliance Requirement: Reporting Questioned Costs: Not determinable Repeat Finding 2021-001 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 also 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. Condition and Context: The Organization did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Organization inadvertently excluded certain value-based incentive payments in its reporting of total revenue/net charges from patient care for all quarters presented. The adjustments needed within the PRF report to correct the errors decreased year over year lost revenues from $44,218,904 to $43,347,174 on total distributions of PRF funding of $19,837,251. Effect: The amounts reported to Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management led to exclusion of certain value-based incentive payments in all quarters presented. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. View of Responsible Officials: Management concurs with the finding and anticipates updating this information with its Period 4 reporting.