FAC Explorer

Audit 54656

FY End
2022-12-31
Total Expended
$6.05M
Findings
6
Programs
3
Organization: Regional West Health Services (NE)
Year: 2022 Accepted: 2023-09-28
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
58484 2022-005 Material Weakness - L
58485 2022-006 Material Weakness - L
58486 2022-007 Material Weakness - L
634926 2022-005 Material Weakness - L
634927 2022-006 Material Weakness - L
634928 2022-007 Material Weakness - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $5.90M Yes 3
93.697 Testing for Rural Health Clinics $149,462 - 0
93.461 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $123 - 0

Contacts

Name Title Type
ZQ14R2U4N785 Jeanne McKerrigan Auditee
3086302244 Jess Paisley Auditor
No contacts on file

Notes to SEFA

Title: Note 4: Provider Relief Funds Accounting Policies: Note 1: Basis of Presentation - The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of RWHS under programs of the federal government for the year ended December 31, 2022. The information in this schedule is presented in accordance with the requirements for 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 RWHS, it is not intended to and does not present the financial position, changes in net assets or cash flows of RWHS. Note 2: Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting, with the exception for the COVID-19 Testing for the Uninsured Program, which are recorded based on when the claim is deemed eligible as evidenced by receipt of monies form the federal agency. 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: RWHS does not draw for indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate. RWHS received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) program (Federal Financial Assistance Listing #93.498) during the year ended December 31, 2021. RWHS incurred eligible expenditures and, therefore, recognized revenue totaling $-0- and $6,092,821 for the years ended December 31, 2022 and 2021, respectively, in the financial statements. In accordance with the compliance supplement addendum, the PRF expenditures recognized on the schedule are based on the reporting to HHS for the period ending December 31, 2022, as required under the PRF program. The amount of PRF expenditures included on the schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amount that have been reimbursed or are obligated to be reimbursed by other sources. Actual results could differ from those estimates.
Title: Note 5: Principles of Consolidation Accounting Policies: Note 1: Basis of Presentation - The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of RWHS under programs of the federal government for the year ended December 31, 2022. The information in this schedule is presented in accordance with the requirements for 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 RWHS, it is not intended to and does not present the financial position, changes in net assets or cash flows of RWHS. Note 2: Summary of Significant Accounting Policies - Expenditures reported on the Schedule are reported on the accrual basis of accounting, with the exception for the COVID-19 Testing for the Uninsured Program, which are recorded based on when the claim is deemed eligible as evidenced by receipt of monies form the federal agency. 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: RWHS does not draw for indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate. The consolidated schedule of expenditures of federal awards includes the federal grant activity of RWHS and its consolidated subsidiaries (collectively, TWHS) which received federal financial assistance. Significant intercompany balances and transactions have been eliminated in the consolidated schedule of expenditures of federal awards. The following entities and their associated TIN included within the schedule are as follows: Regional West Medical Center TIN 47-0385129; Regional West Physicians Clinic TIN 36-3314159; Regional West Garden County TIN 39-1904975

Finding Details

Finding 2022-005
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: RWHS must establish and maintain effective internal control over federal awards that provides reasonable assurance that RWHS is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the quarterly revenue on an actual and budgeted basis to be reported to the federal agency by March 31, 2023. Condition: RWHS submitted instances of inaccurate actual revenue for quarters 3 and 4 of 2021 and 2022 and inaccurate budgeted revenue for quarters 2 and 3 of 2021. Cause: RWHS did not have a control in place to assure proper reporting of the quarterly revenue totals. Effect: The quarterly revenue totals reported to the federal agency were inaccurate in 2021 and 2022. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures to ensure that the required revenue totals are reported accurately in accordance with the terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-006
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: RWHS selected option II to calculate lost revenue for its subsidiary, which consists of a comparison of actual results during the period of availability to the approved budget in 2020 and 2021. The budget was required to be approved by March 27, 2020. The budget used for 2021 and 2022 was not approved by the required date. Cause: RWHS did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the use of option II was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 4 was considered incorrect. Budgeted amounts reported for 2021 and 2022 were not from a budget approved by March 27, 2020. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 PRF report. Repeat Finding from Prior Year: No Recommendation: We recommend RWHS enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.
Finding 2022-007
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: RWHS selected option I to calculate lost revenue for its subsidiary, which consists of reporting quarterly net revenue by payor during the period of availability. Net revenue was determined by projecting payor deductions instead of using actual deductions as required by the terms and conditions of the award. Cause: RWHS did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the use of option I was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 4 was considered incorrect. Quarterly amounts reported were not based on actual net revenue by payor. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 PRF report. Repeat Finding from Prior Year: No Recommendation: We recommend RWHS enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.
Finding 2022-005
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: RWHS must establish and maintain effective internal control over federal awards that provides reasonable assurance that RWHS is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the quarterly revenue on an actual and budgeted basis to be reported to the federal agency by March 31, 2023. Condition: RWHS submitted instances of inaccurate actual revenue for quarters 3 and 4 of 2021 and 2022 and inaccurate budgeted revenue for quarters 2 and 3 of 2021. Cause: RWHS did not have a control in place to assure proper reporting of the quarterly revenue totals. Effect: The quarterly revenue totals reported to the federal agency were inaccurate in 2021 and 2022. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management implement procedures to ensure that the required revenue totals are reported accurately in accordance with the terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-006
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: RWHS selected option II to calculate lost revenue for its subsidiary, which consists of a comparison of actual results during the period of availability to the approved budget in 2020 and 2021. The budget was required to be approved by March 27, 2020. The budget used for 2021 and 2022 was not approved by the required date. Cause: RWHS did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the use of option II was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 4 was considered incorrect. Budgeted amounts reported for 2021 and 2022 were not from a budget approved by March 27, 2020. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 PRF report. Repeat Finding from Prior Year: No Recommendation: We recommend RWHS enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.
Finding 2022-007
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: RWHS selected option I to calculate lost revenue for its subsidiary, which consists of reporting quarterly net revenue by payor during the period of availability. Net revenue was determined by projecting payor deductions instead of using actual deductions as required by the terms and conditions of the award. Cause: RWHS did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the use of option I was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 4 was considered incorrect. Quarterly amounts reported were not based on actual net revenue by payor. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 PRF report. Repeat Finding from Prior Year: No Recommendation: We recommend RWHS enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.