FAC Explorer

Audit 491

FY End
2022-12-31
Total Expended
$5.40M
Findings
2
Programs
4
Organization: Triad Health Systems, Inc. (KY)
Year: 2022 Accepted: 2023-10-03
Auditor: Blue & Company LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
248 2022-001 Material Weakness Yes L
576690 2022-001 Material Weakness Yes L

Programs

ALN Program Spent Major Findings
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $3.43M Yes 0
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $1.24M Yes 0
93.526 Affordable Care Act (aca) Grants for Capital Development in Health Centers $599,638 - 0
93.498 Provider Relief Fund $123,081 Yes 1

Contacts

Name Title Type
CQ71GNJ374E5 Adam Craft Auditee
8595671271 Steve Jones 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: THS 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 grant activity of Triad Health Systems, Inc. (“THS”) under programs of the federal government for the year ended December 31, 2022. The information in this Schedule is presented in accordance with 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”). Because the Schedule presents only a selected portion of the operations of THS, it is not intended to and does not present the financial position, changes in net assets, or cash flows of THS.
Title: Provider Relief Funds 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: THS has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule for the Provider Relief Fund (“PRF”) under ALN 93.498 are based on the THS’s December 31, 2022 report to the PRF Reporting Portal. Under terms and conditions of the Provider Relief Funds established by the Coronavirus Aids, Relief, and Economic Security (“CARES”) Act, THS is required to report COVID-19 related expenses and lost revenue to the U.S. Department of Health and Human Services (“HHS”). Guidance from HHS has required the reporting of the COVID-19 related expenses and lost revenue within certain reporting timetables based on the date that funds were received. For the years ended December 31, 2022 and 2021, THS recognized $827,491 and $322,372, respectively, as provider relief fund revenue in the statements of operations and changes in net assets as the terms and conditions of the PRF grant were satisfied by THS. The 2022 Schedule includes PRF of $123,081 which was received by THS from January 1, 2021 to December 31, 2021, the dates designated by HHS for its third and fourth PRF reporting periods.
Title: Donated Personal Protective Equipment 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: THS has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. During 2022, THS did not receive material donated personal protective equipment from federal sources.

Finding Details

Finding 2022-001
MATERIAL WEAKNESS Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 – COVID-19 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 2022-001: Improper Reporting of Lost Revenues on Phase 4 PRF Submission Compliance Requirement(s): Reporting Criteria: Reporting requirements stipulate that when submitting information related to lost revenues attributable to coronavirus on the Health Resources and Services Administration (“HRSA”) Provider Relief Funding reporting portal, patient service revenues must be entered on a quarterly basis from the first quarter of 2019 through the fourth quarter of 2022. Condition – Improper reporting of lost revenues on Phase 4 PRF submission: When submitting information related to Phase 4 of the Provider Relief Fund (“PRF”) program to HRSA, various quarters were not corrected from the incorrect prior year submission, resulting in an overstatement of lost revenues reported in THS’s official filing. Cause – The cause of this deficiency is due to the lack of internal controls to ensure proper reporting of lost revenues on the reporting portal. Effect – The effect is an overstatement of lost revenues reporting to HRSA on the reporting portal. Recommendation – We recommend that THS implement internal control procedures to ensure proper reporting on the HRSA reporting portal in future reporting periods. Management’s Response – We will implement internal control procedures to ensure proper reporting of lost revenues, as is required under the reporting guidelines stipulated by HRSA, in future reporting periods. We do not believe the overstatement of lost revenues resulted in an overstatement of THS’s received allowable funds to be utilized as part of the Provider Relief Fund program.
Finding 2022-001
MATERIAL WEAKNESS Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 – COVID-19 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution 2022-001: Improper Reporting of Lost Revenues on Phase 4 PRF Submission Compliance Requirement(s): Reporting Criteria: Reporting requirements stipulate that when submitting information related to lost revenues attributable to coronavirus on the Health Resources and Services Administration (“HRSA”) Provider Relief Funding reporting portal, patient service revenues must be entered on a quarterly basis from the first quarter of 2019 through the fourth quarter of 2022. Condition – Improper reporting of lost revenues on Phase 4 PRF submission: When submitting information related to Phase 4 of the Provider Relief Fund (“PRF”) program to HRSA, various quarters were not corrected from the incorrect prior year submission, resulting in an overstatement of lost revenues reported in THS’s official filing. Cause – The cause of this deficiency is due to the lack of internal controls to ensure proper reporting of lost revenues on the reporting portal. Effect – The effect is an overstatement of lost revenues reporting to HRSA on the reporting portal. Recommendation – We recommend that THS implement internal control procedures to ensure proper reporting on the HRSA reporting portal in future reporting periods. Management’s Response – We will implement internal control procedures to ensure proper reporting of lost revenues, as is required under the reporting guidelines stipulated by HRSA, in future reporting periods. We do not believe the overstatement of lost revenues resulted in an overstatement of THS’s received allowable funds to be utilized as part of the Provider Relief Fund program.