2022-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Living Number: 14.129 Award Period: Year Ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Failure to Maintain Approved Management Agreements Condition: St. John Lutheran Care Center (St. John) was charged a management fee by Lutheran SeniorLife, its parent but did not have an approved management contract meeting the requirements of the regulatory agreement. Questioned costs: $0. Context: St. John did not have an approved management agreement. Cause: St. John?s existing management agreement was with Lutheran Affiliated Services (LAS) from 1992 and had not been updated to reflect the current management fee charged by the successor to LAS, Lutheran SeniorLife. Effect: The management agreement was not approved by HUD and did not contain the provisions required by the regulatory agreement. Recommendation: St. John should enter into an approved management agreement with Lutheran SeniorLife.Views of Responsible Officials and Planned Corrective Actions: St. John updated internal agreements to reflect the change from Lutheran Affiliated Services to Lutheran SeniorLife, but neglected to complete the process with HUD. St John will submit the paperwork to obtain a certified HUD approved management agreement. While the organization was operating without this agreement in place, management fees charged were only to reimburse costs incurred in performing these management functions. During Fiscal Year 2021, St John entered into a refinancing plan with a lender in order to facilitate a repositioning of the facility and to enable facility improvements that were identified. The closing on the refinancing of the existing HUD loan took place on July 8, 2021.
2022-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Award Period: Year Ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: REAC Inspection Results Condition: St. John received a REAC inspection score of less than 31, which denotes the property has physical deficiencies that do not meet contractual obligations to HUD. Questioned costs: None. Context: Results of REAC inspection 613308. Cause: St. John has not corrected all deficiencies identified during the REAC inspection. Effect: Noncompliance with HUD requirements. Recommendation: St. John should work to address all REAC inspection findings.Views of Responsible Officials and Planned Corrective Actions: Subsequent to this survey, the facility incurred significant flooding, which required immediate action. Due to this, St. John did not have the ability to address the findings from the survey. With a protracted insurance claims process and the impact of Covid-19 on building operations, work on the outstanding deficiencies has been delayed. Due to the risk to residents and staff, all outside visitors including maintenance contractors and other vendors has been limited for a number of periods during the pandemic during FY21. Management completed an assessment of the facility?s use and has begun a repositioning plan to bring new living options into the building. In order to complete the needed improvements to the building, St. John has completed a refinancing of its existing HUD debt and negotiated a construction loan to fund the improvements. The closing on the refinancing of the existing HUD loan and the construction loan took place on July 8, 2021.
2022-001 Federal agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Year ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. These funds may not be used to reimburse expenses of losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition: The Organization's internal controls over reporting were not effective. Questioned costs: $0 Context: During the audit, it was determined that on three out of five reports selected for testing, lost revenue was overstated due to differences between revenue reported under the actual revenue method (option one) for reporting lost revenue and the underlying internal financial information. Cause: The system generated report used to compile revenue information for the reports did not include all revenue activity. Effect: Reported lost revenue was calculated incorrectly. On two of the reports selected, there was sufficient lost revenue after accounting for this overreporting to utilize all of the Provider Relief Funds reported. On the other report selected, all Provider Relief Funds were allocated to expenditures.Recommendation: We recommend management implement additional procedures to review reported revenue before submitting reports and adjust the system report used to compile the revenue information to ensure it is correct and reflects the utilization of Provider Relief Funds to replace lost revenue. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the error in selecting an incomplete management revenue report for reporting purposes. For future reporting periods, management will correct the management report utilized and ensure it balances with total revenues. Management will correct the amounts report for 2019 through 2022 beginning with Provider Relief Funds reporting period #4.
2022-002 Federal agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Year ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. These funds may not be used to reimburse expenses of losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition: The Organization's internal controls over reporting were not effective. Questioned costs: $0 Context: During the audit, it was determined that one out of 13 expenditures selected for testing did not agree to the supporting payment. Cause: Purchase order information was used to accumulate COVID-19 related costs for reporting on during reporting period three. The amount paid for the items on the purchase order was less than the original purchase order.Effect: The listing of expenditures used to populate the report was overstated due to using purchase order information. There were sufficient other expenditures to utilize the infection control payment. Recommendation: We recommend expenditures only be allocated to Provider Relief Funds after they have been paid. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the error in the report and for future reporting periods will verify expenditures have been paid before reporting.
2022-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Living Number: 14.129 Award Period: Year Ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Failure to Maintain Approved Management Agreements Condition: St. John Lutheran Care Center (St. John) was charged a management fee by Lutheran SeniorLife, its parent but did not have an approved management contract meeting the requirements of the regulatory agreement. Questioned costs: $0. Context: St. John did not have an approved management agreement. Cause: St. John?s existing management agreement was with Lutheran Affiliated Services (LAS) from 1992 and had not been updated to reflect the current management fee charged by the successor to LAS, Lutheran SeniorLife. Effect: The management agreement was not approved by HUD and did not contain the provisions required by the regulatory agreement. Recommendation: St. John should enter into an approved management agreement with Lutheran SeniorLife.Views of Responsible Officials and Planned Corrective Actions: St. John updated internal agreements to reflect the change from Lutheran Affiliated Services to Lutheran SeniorLife, but neglected to complete the process with HUD. St John will submit the paperwork to obtain a certified HUD approved management agreement. While the organization was operating without this agreement in place, management fees charged were only to reimburse costs incurred in performing these management functions. During Fiscal Year 2021, St John entered into a refinancing plan with a lender in order to facilitate a repositioning of the facility and to enable facility improvements that were identified. The closing on the refinancing of the existing HUD loan took place on July 8, 2021.
2022-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance ? Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Award Period: Year Ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: REAC Inspection Results Condition: St. John received a REAC inspection score of less than 31, which denotes the property has physical deficiencies that do not meet contractual obligations to HUD. Questioned costs: None. Context: Results of REAC inspection 613308. Cause: St. John has not corrected all deficiencies identified during the REAC inspection. Effect: Noncompliance with HUD requirements. Recommendation: St. John should work to address all REAC inspection findings.Views of Responsible Officials and Planned Corrective Actions: Subsequent to this survey, the facility incurred significant flooding, which required immediate action. Due to this, St. John did not have the ability to address the findings from the survey. With a protracted insurance claims process and the impact of Covid-19 on building operations, work on the outstanding deficiencies has been delayed. Due to the risk to residents and staff, all outside visitors including maintenance contractors and other vendors has been limited for a number of periods during the pandemic during FY21. Management completed an assessment of the facility?s use and has begun a repositioning plan to bring new living options into the building. In order to complete the needed improvements to the building, St. John has completed a refinancing of its existing HUD debt and negotiated a construction loan to fund the improvements. The closing on the refinancing of the existing HUD loan and the construction loan took place on July 8, 2021.
2022-001 Federal agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Year ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. These funds may not be used to reimburse expenses of losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition: The Organization's internal controls over reporting were not effective. Questioned costs: $0 Context: During the audit, it was determined that on three out of five reports selected for testing, lost revenue was overstated due to differences between revenue reported under the actual revenue method (option one) for reporting lost revenue and the underlying internal financial information. Cause: The system generated report used to compile revenue information for the reports did not include all revenue activity. Effect: Reported lost revenue was calculated incorrectly. On two of the reports selected, there was sufficient lost revenue after accounting for this overreporting to utilize all of the Provider Relief Funds reported. On the other report selected, all Provider Relief Funds were allocated to expenditures.Recommendation: We recommend management implement additional procedures to review reported revenue before submitting reports and adjust the system report used to compile the revenue information to ensure it is correct and reflects the utilization of Provider Relief Funds to replace lost revenue. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the error in selecting an incomplete management revenue report for reporting purposes. For future reporting periods, management will correct the management report utilized and ensure it balances with total revenues. Management will correct the amounts report for 2019 through 2022 beginning with Provider Relief Funds reporting period #4.
2022-002 Federal agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Year ended June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Controls over Compliance ? Other Matters Criteria or specific requirement: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. These funds may not be used to reimburse expenses of losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition: The Organization's internal controls over reporting were not effective. Questioned costs: $0 Context: During the audit, it was determined that one out of 13 expenditures selected for testing did not agree to the supporting payment. Cause: Purchase order information was used to accumulate COVID-19 related costs for reporting on during reporting period three. The amount paid for the items on the purchase order was less than the original purchase order.Effect: The listing of expenditures used to populate the report was overstated due to using purchase order information. There were sufficient other expenditures to utilize the infection control payment. Recommendation: We recommend expenditures only be allocated to Provider Relief Funds after they have been paid. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the error in the report and for future reporting periods will verify expenditures have been paid before reporting.