FAC Explorer

Audit 55328

FY End
2022-12-31
Total Expended
$29.34M
Findings
2
Programs
2
Organization: Northbay Healthcare Corporation (CA)
Year: 2022 Accepted: 2023-09-24
Auditor: Moss Adams LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
59878 2022-002 Significant Deficiency - L
636320 2022-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $27.03M Yes 1
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $720,307 - 0

Contacts

Name Title Type
YJP6SBZ2L9J8 Joseph D'angina Auditee
7076463111 Kimberly Sokoloff Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT 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 auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health (the System), 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 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 the System, it is not intended to, and does not present the financial position, changes in net assets, or cash flows of the System. The Schedule includes expenditures of federal awards from NorthBay Healthcare Group (Taxpayer Identification Number 94-1458282), NorthBay/Physicians Surgery Center, LLC (Taxpayer Identification Number 20-3502901), and Solano Diagnostic Partners (Taxpayer Identification Number 93-1013774). In accordance with guidance from the U.S. Department of Health and Human Services (DHHS), the System included the Reporting Period 3 and Period 4 expenditures for Provider Relief Fund Assistance Listing No. 93.498 of $27,029,367 in the Schedule for the year ended December 31, 2022, to align with DHHS reporting guidelines. In accordance with U.S. GAAP, the total amount of $27,029,367 of Provider Relief Fund assistance received by the System was recognized as revenue through the year ended December 31, 2021, and is included in the beginning net assets as of and for the year ended December 31, 2022. The Schedule includes $2,308,532 of expenditures for U.S. Department of Homeland Security Disaster Grants Public Assistance (Presidentially Declared Disasters) Assistance Listing No. 97.036. These awards were approved during the year ended December 31, 2022 and relate to expenditures that were incurred during the years ended December 31, 2021 and 2020.
Title: NOTE 3 INDIRECT COST RATE Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT 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 auditee did not use the de minimis cost rate. The System has elected not to use the 10-percent de minimis indirect cost rate as allowed under Uniform Guidance.
Title: NOTE 4 SUBRECIPIENT AWARDS Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT 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 auditee did not use the de minimis cost rate. The System did not provide any federal awards to subrecipients during the year ended December 31, 2022.

Finding Details

Finding 2022-002
Finding 2022-002 ? Reporting ? Significant Deficiency in Internal Control Over Compliance Federal Program: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (Assistance Listing #93.498) Federal Agency: U.S. Department of Health and Human Services Award Year: 2021 Criteria: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program, providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. Condition: During our testing of the reporting of expenses that were reimbursed by Provider Relief Fund distributions for Periods 3 and 4, it was identified that approximately $210 thousand of reported expenses did not comply with the terms and conditions of the Provider Relief Fund Program and were therefore ineligible to be reimbursed under Provider Relief Fund distributions. Cause: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health has experienced business and staffing disruptions in recent fiscal years. This resulted in a lack of sufficient review over submissions and led to errors in reporting expenses under the Provider Relief Fund Program for Periods 3 and 4. This situation, coupled with the evolving and complex nature of the specific terms and conditions of the Provider Relief Fund Program, is the primary cause of the condition noted above. Effect or potential effect: Due to the above noted cause, expenses were reported to HRSA as being reimbursed by the Provider Relief Fund distributions for Period 3 and 4 when the expenses did not comply with the terms and conditions of the Provider Relief Fund Program. However, the total lost revenue amounts from the Periods 3 and 4 Provider Relief Fund reporting demonstrate a significant amount of cumulative unused lost revenue that would exceed the total ineligible expenses noted as a result of the Period 3 and 4 reporting errors. Questioned costs: None to be reported. Context: During the fiscal year ended December 31, 2022, health care providers were subject to staffing shortages as well as increased operational challenges as a result of the COVID-19 pandemic. As a result, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health did not have sufficient staffing levels to perform precise reviews to validate the eligibility of expenses subject to Provider Relief Fund reporting for Periods 3 and 4. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health implement review controls at a sufficient precision threshold to detect and identify errors in reporting expense amounts that do not comply with the terms and conditions of the Provider Relief Fund Program. Views of responsible officials: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health agrees with the finding and management has implemented a corrective action plan. Management has implemented a more precise review control over future federal award reporting submissions to ensure all reported expenditures comply with the terms and conditions of the federal award. Further, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health had sufficient unused lost revenues of approximately $114,915,000 and $133,021,000 from the Periods 3 and 4 Provider Relief Fund reporting to fully cover the Provider Relief Fund distributions for Periods 3 and 4, respectively.
Finding 2022-002
Finding 2022-002 ? Reporting ? Significant Deficiency in Internal Control Over Compliance Federal Program: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (Assistance Listing #93.498) Federal Agency: U.S. Department of Health and Human Services Award Year: 2021 Criteria: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program, providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. Condition: During our testing of the reporting of expenses that were reimbursed by Provider Relief Fund distributions for Periods 3 and 4, it was identified that approximately $210 thousand of reported expenses did not comply with the terms and conditions of the Provider Relief Fund Program and were therefore ineligible to be reimbursed under Provider Relief Fund distributions. Cause: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health has experienced business and staffing disruptions in recent fiscal years. This resulted in a lack of sufficient review over submissions and led to errors in reporting expenses under the Provider Relief Fund Program for Periods 3 and 4. This situation, coupled with the evolving and complex nature of the specific terms and conditions of the Provider Relief Fund Program, is the primary cause of the condition noted above. Effect or potential effect: Due to the above noted cause, expenses were reported to HRSA as being reimbursed by the Provider Relief Fund distributions for Period 3 and 4 when the expenses did not comply with the terms and conditions of the Provider Relief Fund Program. However, the total lost revenue amounts from the Periods 3 and 4 Provider Relief Fund reporting demonstrate a significant amount of cumulative unused lost revenue that would exceed the total ineligible expenses noted as a result of the Period 3 and 4 reporting errors. Questioned costs: None to be reported. Context: During the fiscal year ended December 31, 2022, health care providers were subject to staffing shortages as well as increased operational challenges as a result of the COVID-19 pandemic. As a result, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health did not have sufficient staffing levels to perform precise reviews to validate the eligibility of expenses subject to Provider Relief Fund reporting for Periods 3 and 4. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health implement review controls at a sufficient precision threshold to detect and identify errors in reporting expense amounts that do not comply with the terms and conditions of the Provider Relief Fund Program. Views of responsible officials: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health agrees with the finding and management has implemented a corrective action plan. Management has implemented a more precise review control over future federal award reporting submissions to ensure all reported expenditures comply with the terms and conditions of the federal award. Further, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health had sufficient unused lost revenues of approximately $114,915,000 and $133,021,000 from the Periods 3 and 4 Provider Relief Fund reporting to fully cover the Provider Relief Fund distributions for Periods 3 and 4, respectively.