Audit 46800

FY End
2022-12-31
Total Expended
$49.12M
Findings
2
Programs
5
Year: 2022 Accepted: 2023-09-26
Auditor: Ernst & Young

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
49535 2022-001 Material Weakness - L
625977 2022-001 Material Weakness - L

Contacts

Name Title Type
SJRHLPN3L9T8 Jennifer Clark Auditee
5162551651 Meaghan Schachtel Auditor
No contacts on file

Notes to SEFA

Title: Disaster Grants Public Assistance (Presidentially Declared Disasters) Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the Federal grant activity of South Nassau Communities Hospital and Subsidiaries (d/b/a Mount Sinai South Nassau) (the Hospital), reported on the accrual basis of accounting. 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 (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements of the Hospital. For purposes of the Schedule, federal awards include any assistance provided by a federal agency directly or indirectly in the form of grants, contracts, cooperative agreements, loan and loan guarantees, or other non-cash assistance. Direct 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. 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 Hospital did not make this election and does not include indirect costs in the amounts reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Non-Federal entities must record expenditures on the Schedule when: (1) the Federal Emergency Management Agency (FEMA) has approved the non-Federal entitys project worksheet, and (2) the non-Federal entity has incurred the eligible expenditures. In January 2015, FEMA approved a project worksheet for the Hospital totaling approximately $171.0 million (90% funded by FEMA for a total award of approximately $154.0 million) to allow for the Hospital to either demolish, repair or restore certain facilities damaged by Super Storm Sandy. Expenditures related to the approved project worksheet are reported on the Schedule as incurred. In September 2016, FEMA approved the Hospitals request for an alternative project which expanded the scope of work. Expenditures totaling $46,980,585 are included on the accompanying Schedule for the year ended December 31, 2022. The original FEMA approved date for the project to be completed and funds spent was January 15, 2019. On January 15, 2019, the Hospitals request for a time extension from the New York State Division of Homeland Security and Emergency Services and FEMA was approved to be extended through December 31, 2025.
Title: Vaccines for Children Program Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the Federal grant activity of South Nassau Communities Hospital and Subsidiaries (d/b/a Mount Sinai South Nassau) (the Hospital), reported on the accrual basis of accounting. 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 (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements of the Hospital. For purposes of the Schedule, federal awards include any assistance provided by a federal agency directly or indirectly in the form of grants, contracts, cooperative agreements, loan and loan guarantees, or other non-cash assistance. Direct 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. 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 Hospital did not make this election and does not include indirect costs in the amounts reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During the year ended December 31, 2022, the Hospital participated in the New York State Department of Health Vaccines for Children Program (Federal Assistance Listing No. 93.268) through the provision of vaccinations. The U.S. Department of Health and Human Services (HHS), the federal agency that sponsors this program, has determined that the vaccines administered are considered property in lieu of money and, therefore, should be reported as federal awards received by the Hospital for purposes of presentation in the Schedule.
Title: COVID-19 Provider Relief Fund Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the Federal grant activity of South Nassau Communities Hospital and Subsidiaries (d/b/a Mount Sinai South Nassau) (the Hospital), reported on the accrual basis of accounting. 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 (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements of the Hospital. For purposes of the Schedule, federal awards include any assistance provided by a federal agency directly or indirectly in the form of grants, contracts, cooperative agreements, loan and loan guarantees, or other non-cash assistance. Direct 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. 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 Hospital did not make this election and does not include indirect costs in the amounts reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. In accordance with HHS requirements specific to Federal Assistance Listing No. 93.498, COVID-19 Provider Relief Fund, the amount presented on the accompanying Schedule for the year ended December 31, 2022 for Federal Assistance Listing No. 93.498 relates to (i) Provider Relief Fund (PRF) payments received from January 1, 2021 through December 31, 2021 (ii) used for PRF-eligible activity from the period January 1, 2020 through December 31, 2022. The payment receipt period and activity period and the resulting amount presented on the accompanying Schedule for the year ended December 31, 2022 reconciles to the PRF information previously reported to the Health Resources and Services Administration (HRSA) for PRF Reporting Periods 3 and 4 as follows:(see the Notes to the SEFA for the chart). The lost revenues reported by the Hospital during the periods of availability through PRF Reporting Period 4 (January 1, 2020 through December 31, 2022) are in excess of the distributions received in PRF Reporting Periods 1 and 2 (which addressed payments received during April 10, 2020 to December 31, 2020, and previously reported on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2021) and distributions received in PRF Reporting Periods 3 and 4 (January 1, 2021 through December 31, 2021) and, therefore, the amounts presented in the table above and on the accompanying Schedule are limited to distributions received in PRF Reporting Periods 3 and 4.

Finding Details

Finding 2022-001 ? Reporting Internal control deficiency and noncompliance over the calculation of lost revenues attributable to Coronavirus Identification of the federal program: Federal Assistance Listing Number 93.498 ? Program Name: COVID-19 ? Provider Relief Fund ? Grantor: Department of Health and Human Services (HHS) ? Federal award identification number: Not Applicable Criteria or specific requirement (including statutory, regulatory or other citation): Section 200 303 of the Uniform Guidance states the following regarding internal control: ?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).? The terms and conditions of the award requires the recipient to submit reports as the Secretary of the 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. Condition: In our Uniform Guidance grant compliance testing, we noted that a review by management of the Period 3 and Period 4 Provider Relief Fund (PRF) reports was not performed. In addition, the lost revenue calculations prepared by management were based on inaccurate data and limited to the amount of PRF funding received, which resulted in lost revenues attributable to Coronavirus being reported incorrectly in the HHS reporting portal (the Portal) for Period 3 and Period 4. This resulted in an understatement of lost revenue in the PRF Portal submissions. Cause: Management did not have sufficiently designed internal controls in place to ensure the calculations of lost revenues attributable to Coronavirus were prepared in accordance with the PRF requirements and free from error. Effect or potential effect: The calculations of lost revenues attributable to Coronavirus were reported incorrectly in the Portal for Period 3 and Period 4. Questioned costs: None. Context: During our testing of compliance attribute L: Reporting, we obtained the PRF Portal submissions for Period 3 and Period 4 and management's narrative on the selected lost revenue calculation method. We observed that management incorrectly capped the amount of lost revenue reported in the Portal at the amount of funding received for the respective Portal periods. We further observed that the supporting data entry workbook was using incorrect data totals. Total lost revenues submitted in the Portal were $25,799 and $1,520,543 for Period 3 and Period 4, respectively. Actual lost revenues to be submitted for Period 3 and Period 4 were $19,483,717 and $20,311,455, respectively. Lack of review of the PRF Portal submissions and the data entry workbook supporting them resulted in inaccurate lost revenues attributable to Coronavirus being reported in the Period 3 and Period 4 Portal submissions. The errors had no impact on meeting the requirements to retain the funding received as they resulted in understatements of lost revenues attributable to Coronavirus. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting in the Portal. Views of responsible officials: Management agrees with the finding. Management will develop internal controls to review and approve supporting documentation and calculations of lost revenues attributable to Coronavirus prior to future Portal submissions, where applicable. Management has contacted HRSA directly to inform them of the reporting errors and awaits next steps to address remediation as no Period 5 Portal submission is required. Management intends to revise their Period 3 and 4 lost revenue amounts to be in line with revised calculations.
Finding 2022-001 ? Reporting Internal control deficiency and noncompliance over the calculation of lost revenues attributable to Coronavirus Identification of the federal program: Federal Assistance Listing Number 93.498 ? Program Name: COVID-19 ? Provider Relief Fund ? Grantor: Department of Health and Human Services (HHS) ? Federal award identification number: Not Applicable Criteria or specific requirement (including statutory, regulatory or other citation): Section 200 303 of the Uniform Guidance states the following regarding internal control: ?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).? The terms and conditions of the award requires the recipient to submit reports as the Secretary of the 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. Condition: In our Uniform Guidance grant compliance testing, we noted that a review by management of the Period 3 and Period 4 Provider Relief Fund (PRF) reports was not performed. In addition, the lost revenue calculations prepared by management were based on inaccurate data and limited to the amount of PRF funding received, which resulted in lost revenues attributable to Coronavirus being reported incorrectly in the HHS reporting portal (the Portal) for Period 3 and Period 4. This resulted in an understatement of lost revenue in the PRF Portal submissions. Cause: Management did not have sufficiently designed internal controls in place to ensure the calculations of lost revenues attributable to Coronavirus were prepared in accordance with the PRF requirements and free from error. Effect or potential effect: The calculations of lost revenues attributable to Coronavirus were reported incorrectly in the Portal for Period 3 and Period 4. Questioned costs: None. Context: During our testing of compliance attribute L: Reporting, we obtained the PRF Portal submissions for Period 3 and Period 4 and management's narrative on the selected lost revenue calculation method. We observed that management incorrectly capped the amount of lost revenue reported in the Portal at the amount of funding received for the respective Portal periods. We further observed that the supporting data entry workbook was using incorrect data totals. Total lost revenues submitted in the Portal were $25,799 and $1,520,543 for Period 3 and Period 4, respectively. Actual lost revenues to be submitted for Period 3 and Period 4 were $19,483,717 and $20,311,455, respectively. Lack of review of the PRF Portal submissions and the data entry workbook supporting them resulted in inaccurate lost revenues attributable to Coronavirus being reported in the Period 3 and Period 4 Portal submissions. The errors had no impact on meeting the requirements to retain the funding received as they resulted in understatements of lost revenues attributable to Coronavirus. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting in the Portal. Views of responsible officials: Management agrees with the finding. Management will develop internal controls to review and approve supporting documentation and calculations of lost revenues attributable to Coronavirus prior to future Portal submissions, where applicable. Management has contacted HRSA directly to inform them of the reporting errors and awaits next steps to address remediation as no Period 5 Portal submission is required. Management intends to revise their Period 3 and 4 lost revenue amounts to be in line with revised calculations.