FAC Explorer

Audit 46078

FY End
2022-06-30
Total Expended
$3.41M
Findings
2
Programs
3
Organization: Mary Greeley Medical Center (IA)
Year: 2022 Accepted: 2023-03-30
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
48304 2022-001 Significant Deficiency - L
624746 2022-001 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $2.62M Yes 1
93.461 Covid-19 Testing for the Uninsured $208,598 - 0
21.019 Coronavirus Relief Fund $86,594 - 0

Contacts

Name Title Type
L8T8W9JMB2C6 Gary Botine Auditee
5152392114 Ryan Weber 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 Medical Center has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Mary Greeley Medical Center (Medical Center) under programs of the federal government for the year ended June 30, 2022. The information in this 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 presented in the Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.For purposes of the Schedule, federal awards include all federal assistance entered into directly between the Medical Center and the federal government and sub-awards from nonfederal organizations made under federally sponsored agreements. The Schedule does not include payments received under Medicare and Medicaid reimbursement programs. Because the Schedule presents only a selected portion of the activities of the Medical Center, it is not intended to, and does not, present the net position, changes in net position or cash flows of the Medical Center.
Title: Subrecipients 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 Medical Center has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. None of the federal expenditures presented in the Schedule were provided to subrecipients during the year ended June 30, 2022.
Title: Noncash Assistance, Insurance, Loans and Loan Guarantees Outstanding 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 Medical Center has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Medical Center did not receive any noncash assistance during the year ended June 30, 2022. There were no federal awards expended for insurance or any loans or loan guarantees outstanding as of June 30, 2022.
Title: Provider Relief Fund 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 Medical Center has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The Medical Center received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) program (93.498) during the years ended June 30, 2022, 2021 and 2020. In accordance with HHS guidance, the Medical Center included revenue of approximately $2,617,874 on the schedule of expenditures of federal awards for the year ended June 30, 2022, which was recorded as revenue on the June 30, 2021 financial statements.

Finding Details

Finding 2022-001
Finding 2022-001 ? Lost Revenue Reporting U.S. Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Payments received during Period 2: July 1, 2020 to December 31, 2020 Criteria: Title 2, Subtitle A Chapter II Part 200 Subpart D 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). In addition, the terms and conditions of the award requires the recipient to submit reports as the secretary of the U.S. Department of Health and Human Services (HHS) determines are needed to ensure compliance with conditions that are imposed on the payment, and such reports shall be in such form, with such content, as specified by the secretary of HHS in future program instructions directed to all recipients. Specific criteria have been established by HHS in their terms and conditions related to allowable costs and reporting for this program including proper reporting of critical information, such as amounts included in reimbursed expense and lost revenues table. Condition: For the Medical Center?s Period 2 reporting in the HRSA PRF reporting portal, the Medical Center inaccurately reported lost revenues, resulting in an overstatement of lost revenues. Cause: Management did not have effective internal controls in place to ensure reporting of lost revenues were adequately reviewed before submission. Effect or potential effect: Quarterly revenues reported in the PRF reporting portal were misstated for several quarters, resulting in a total overstatement of actual 2019 revenues of $5,197,094, a total overstatement of actual 2020 revenues of $3,996,899, and a total understatement of 2021 actual revenues of $1,915,433. The total net impact of these misstatements to the lost revenue calculation resulted in an understatement of lost revenues reported of $1,903,535. The Medical Center also reported PRF expenses in Period 2 in an amount equal to Period 2 PRF funding received. Therefore, the Medical Center did not report actual revenue data for the third or fourth quarters of 2021. The portal included $100,237,417 of third and fourth quarter 2019 actual revenues in the calculated lost revenue for 2021. While reporting of lost revenue was inaccurate, there were no questioned costs. Questioned Costs: None Context: The Medical Center reported lost revenue using Option 1, comparing actual revenues for 2020 and 2021 to actual revenues for 2019. The Medical Center had errors in their formulas calculating actual revenue for the first quarter of 2019, second quarter of 2019, third quarter of 2019, and the second quarter of 2020. Additionally, the Medical Center used preliminary rather than final, audited actual revenue amounts for the second quarter of 2021. Whereas Period 2 PRF expenses were equal to Period 2 PRF distributions received and lost revenue was not needed to qualify for the Period 2 PRF distributions, the Medical Center did not submit actual revenue data for the third nor fourth quarter of 2021. As a result, the portal calculated a lost revenue amount for those quarters equal to actual revenues for the third quarter of 2019 and the fourth quarter of2019. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting of quarterly revenue amounts in the portal. This will ensure the calculation of lost revenues complies with Terms and Conditions of the federal program. Views of responsible officials: Management agrees with the finding and recommendations.
Finding 2022-001
Finding 2022-001 ? Lost Revenue Reporting U.S. Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Payments received during Period 2: July 1, 2020 to December 31, 2020 Criteria: Title 2, Subtitle A Chapter II Part 200 Subpart D 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). In addition, the terms and conditions of the award requires the recipient to submit reports as the secretary of the U.S. Department of Health and Human Services (HHS) determines are needed to ensure compliance with conditions that are imposed on the payment, and such reports shall be in such form, with such content, as specified by the secretary of HHS in future program instructions directed to all recipients. Specific criteria have been established by HHS in their terms and conditions related to allowable costs and reporting for this program including proper reporting of critical information, such as amounts included in reimbursed expense and lost revenues table. Condition: For the Medical Center?s Period 2 reporting in the HRSA PRF reporting portal, the Medical Center inaccurately reported lost revenues, resulting in an overstatement of lost revenues. Cause: Management did not have effective internal controls in place to ensure reporting of lost revenues were adequately reviewed before submission. Effect or potential effect: Quarterly revenues reported in the PRF reporting portal were misstated for several quarters, resulting in a total overstatement of actual 2019 revenues of $5,197,094, a total overstatement of actual 2020 revenues of $3,996,899, and a total understatement of 2021 actual revenues of $1,915,433. The total net impact of these misstatements to the lost revenue calculation resulted in an understatement of lost revenues reported of $1,903,535. The Medical Center also reported PRF expenses in Period 2 in an amount equal to Period 2 PRF funding received. Therefore, the Medical Center did not report actual revenue data for the third or fourth quarters of 2021. The portal included $100,237,417 of third and fourth quarter 2019 actual revenues in the calculated lost revenue for 2021. While reporting of lost revenue was inaccurate, there were no questioned costs. Questioned Costs: None Context: The Medical Center reported lost revenue using Option 1, comparing actual revenues for 2020 and 2021 to actual revenues for 2019. The Medical Center had errors in their formulas calculating actual revenue for the first quarter of 2019, second quarter of 2019, third quarter of 2019, and the second quarter of 2020. Additionally, the Medical Center used preliminary rather than final, audited actual revenue amounts for the second quarter of 2021. Whereas Period 2 PRF expenses were equal to Period 2 PRF distributions received and lost revenue was not needed to qualify for the Period 2 PRF distributions, the Medical Center did not submit actual revenue data for the third nor fourth quarter of 2021. As a result, the portal calculated a lost revenue amount for those quarters equal to actual revenues for the third quarter of 2019 and the fourth quarter of2019. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting of quarterly revenue amounts in the portal. This will ensure the calculation of lost revenues complies with Terms and Conditions of the federal program. Views of responsible officials: Management agrees with the finding and recommendations.