Audit 49870

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing No. 93.498 U.S. Department of Health and Human Services Period 2 and Period 3 Expenditures Criteria or Specific Requirement ? Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) Condition ? The District is required to prepare and submit periods two and three provider relief fund reporting. These reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs ? Unknown Context ? The period two and three provider relief fund reports were submitted. The District selected option 2 to report lost revenues based on calendar 2020 and 2021 quarterly budgets, required to be approved by the District?s board prior to March 27, 2020, and actual quarterly revenue results for the same period. The District did have a budget approved prior to March 27, 2020 for hospital operations. The approved budget was for fiscal year ended September 30, 2020, thus did not cover the entire required reporting period of December 31, 2020 and the calendar year ending December 31, 2021. Since the District does not budget on a calendar year-basis, but rather fiscal year, the budget related to the period October 1, 2020 through December 31, 2021 was not approved prior to March 27, 2020. In order to estimate the budget at the time of reporting, management completed a detailed analysis of net patient revenue to gross patient revenue during the approved budget period and applied the computed ratio to the actual gross revenue results during Q4 2020 and all four quarters of 2021. This methodology would have been appropriately reported under option 3 within the reporting portal. In addition, certain elements of the District?s detailed analysis and estimation calculation did not agree to the underlying financial reporting documentation on a payer class level. Additionally, the Nursing Home Facilities are managed by a third-party facility and did not have documentation to support the required board approvals were obtained. The Nursing Home Facilities did not maintain supporting documentation that was able to be reconciled to the reported revenues within the portal. Effect ? The District did not elect the proper reporting option of lost revenues, which was originally identified in the audit of period 1. However, the audit of period 1 took place after period 2 and period 3 submissions were reported. Cause ? The District did not agree the Hospital or Nursing Home Facilities patient service revenue reported to underlying financial statement data. Additionally, the District selected option 2 rather than option 3. Identification as a repeat finding ? Repeat finding 2021-002 Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing No. 93.498 U.S. Department of Health and Human Services Period 2 and Period 3 Expenditures Criteria or Specific Requirement ? Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) Condition ? The District is required to prepare and submit periods two and three provider relief fund reporting. These reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs ? Unknown Context ? The period two and three provider relief fund reports were submitted. The District selected option 2 to report lost revenues based on calendar 2020 and 2021 quarterly budgets, required to be approved by the District?s board prior to March 27, 2020, and actual quarterly revenue results for the same period. The District did have a budget approved prior to March 27, 2020 for hospital operations. The approved budget was for fiscal year ended September 30, 2020, thus did not cover the entire required reporting period of December 31, 2020 and the calendar year ending December 31, 2021. Since the District does not budget on a calendar year-basis, but rather fiscal year, the budget related to the period October 1, 2020 through December 31, 2021 was not approved prior to March 27, 2020. In order to estimate the budget at the time of reporting, management completed a detailed analysis of net patient revenue to gross patient revenue during the approved budget period and applied the computed ratio to the actual gross revenue results during Q4 2020 and all four quarters of 2021. This methodology would have been appropriately reported under option 3 within the reporting portal. In addition, certain elements of the District?s detailed analysis and estimation calculation did not agree to the underlying financial reporting documentation on a payer class level. Additionally, the Nursing Home Facilities are managed by a third-party facility and did not have documentation to support the required board approvals were obtained. The Nursing Home Facilities did not maintain supporting documentation that was able to be reconciled to the reported revenues within the portal. Effect ? The District did not elect the proper reporting option of lost revenues, which was originally identified in the audit of period 1. However, the audit of period 1 took place after period 2 and period 3 submissions were reported. Cause ? The District did not agree the Hospital or Nursing Home Facilities patient service revenue reported to underlying financial statement data. Additionally, the District selected option 2 rather than option 3. Identification as a repeat finding ? Repeat finding 2021-002 Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information.