FAC Explorer

Audit 67387

FY End
2022-06-30
Total Expended
$5.14M
Findings
2
Programs
2
Organization: Mt. Washington Pediatric Hospital, Inc. (MD)
Year: 2022 Accepted: 2023-03-26
Auditor: Ernst & Young

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
65280 2022-001 Material Weakness Yes ABL
641722 2022-001 Material Weakness Yes ABL

Programs

ALN Program Spent Major Findings
93.498 Covid-19 - Provider Relief Fund $5.02M Yes 1
21.027 Covid-19 - Coronavirus State and Local Fiscal Recovery Funds $112,995 - 0

Contacts

Name Title Type
RA69LNTNE8M4 Mary Miller Auditee
4105785163 Tom Sand Auditor
No contacts on file

Notes to SEFA

Title: Note 3: Covid-19 Provider Relief Fund Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes federal grant activity of the Mt. Washington Pediatric Hospital, Inc. and Subsidiaries (the Corporation) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the Corporations consolidated financial statements.The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule of expenditures of federal awards during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, the Corporation did not make this election in the accompanying Schedule. In accordance with the U.S. Department of Health and Human Services requirements specific to Federal Assistance Listing Number 93.498, COVID 19 Provider Relief Fund, the amount presented in on the accompanying Schedule for the year ended June 30, 2022 relates to (i) Provider Relief Fund (PRF) payments received from July 1, 2020 through December 31, 2020 and (ii) used for PRF-eligible activity from the period January 1, 2020 through December 31, 2021. This payment receipt period and activity period and the resulting amount presented on the accompanying Schedule for the year ended June 30, 2022 reconciles to the PRF information reported to the Health Resources and Services Administration (HRSA) for PRF Reporting Period 2 as follows:Name of Reporting Entity for HRSA Reporting Period 2 PRF ReportReporting Entity Tax Identification Number (TIN)Type of DistributionTotal Other ProviderRelief Fund Expenses ReportedTotal Lost Revenues ReportedTotal PRF Expenditures (Not Including Carryover)Mt. Washington Pediatric Hospital520591483General/Targeted$(1)$9,145,324$5,022,091(1)Expenditures within Period 2 were duplicated as further described in Finding 2022-001. Management requested to correct the Period 2 submission with HRSA who granted to unlock the report and resubmit by removing the duplicated expenditures. As such, the table above, represents the corrected Period 2 report.Health and Human Services (HHS) has indicated the PRF Funds should be reported according to reporting requirements of the HRSA PRF Reporting Portal (the Portal). Payments from HHS for PRF are assigned to Payment Received Periods (each, a Period) based upon the date each payment from the PRF was received. Each Period has a specified Period of Availability and timing of reporting requirements. Entities report into the Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability).The Schedule includes $5,022,091 of PRF Funds received from HHS between July, 2020 through December 31, 2020, respectively. The PRF-eligible expenses attributable to Coronavirus Disease 2019 (COVID 19) and lost revenues incurred by the Corporation during the period of availability for PRF Reporting Period 2 (January 1, 2020 through December 31, 2021) are in excess of the general and targeted distributions received from July 1, 2020 through December 31, 2020 and, therefore, the amounts presented in the table above and on the accompanying Schedule are limited to the amount of such distributions. The Corporation did not receive any PRF funds from HHS between January 1, 2021 through June 30, 2021 and therefore, there was no Period 3 HRSA PRF Reporting. The Corporation received PRF payments subsequent to June 30, 2021, which are required to be reported in subsequent HRSA PRF Reporting Periods and, accordingly, pursuant to the requirements specific to Federal Assistance Listing Number 93.498, the activity related to such payments is excluded from the accompanying Schedule.
Title: Note 4: Noncash Federal Assistance Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes federal grant activity of the Mt. Washington Pediatric Hospital, Inc. and Subsidiaries (the Corporation) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and 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). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the Corporations consolidated financial statements.The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule of expenditures of federal awards during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election; however, the Corporation did not make this election in the accompanying Schedule. The Corporation did not receive any noncash Federal assistance including donated personal protective equipment for the year ended June 30, 2022.

Finding Details

Finding 2022-001
Section III ? Federal Award Findings and Questioned Costs Finding Reference: 2022-001 ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing Number 93.498 COVID 19 ? Provider Relief Fund (PRF) Award Periods: Period 2 ? January 1, 2020 to December 31, 2021 Description: Internal control deficiency over review of expenditures Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or specific requirement (including statutory, regulatory or other citation) In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, ?Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Corporation did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures related to the report submission. Cause Management designed a process to accumulate and review expenditures; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Section III ? Federal Award Findings and Questioned Costs Effect or potential effect The Period 1 report submission included an error in reporting personnel and facilities expenditures. Management identified that the expenditures were overstated by $25,192 due to duplicating fringe benefits within the General and Administrative Expenses. The Corporation attempted to correct the overstatement of fringe benefits by restating and unintentionally duplicating expenditures in the amount of $206,002 within the Period 2 submission. Questioned costs $206,002 Identification of a repeat finding This is a repeat finding and relates to prior year finding 2021-001. Context All expenditures were approved by the payroll and finance department. The Corporation developed protocols of which efforts and expenses should be accumulated related to COVID 19 and communicated these protocols throughout the Corporation to ensure costs were being appropriately compiled. Management developed a spreadsheet to accumulate the expenditures for reporting. However, management did not maintain evidence supporting the review and approval of expenses under the grant and subsequently identified errors in the Period 1 submission. These errors were identified prior to the Period 2 submission in which the Corporation attempted to correct by restating and unintentionally duplicating the expenditures. The overstatement of expenditures had no impact on meeting the requirement to retain the funding received. Recommendation We recommend that management develop and implement effective internal controls to ensure expenditures are reviewed and approved to ensure that the report submissions are accurate. View of responsible officials There is no disagreement with the audit finding.
Finding 2022-001
Section III ? Federal Award Findings and Questioned Costs Finding Reference: 2022-001 ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing Number 93.498 COVID 19 ? Provider Relief Fund (PRF) Award Periods: Period 2 ? January 1, 2020 to December 31, 2021 Description: Internal control deficiency over review of expenditures Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or specific requirement (including statutory, regulatory or other citation) In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, ?Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Corporation did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures related to the report submission. Cause Management designed a process to accumulate and review expenditures; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Section III ? Federal Award Findings and Questioned Costs Effect or potential effect The Period 1 report submission included an error in reporting personnel and facilities expenditures. Management identified that the expenditures were overstated by $25,192 due to duplicating fringe benefits within the General and Administrative Expenses. The Corporation attempted to correct the overstatement of fringe benefits by restating and unintentionally duplicating expenditures in the amount of $206,002 within the Period 2 submission. Questioned costs $206,002 Identification of a repeat finding This is a repeat finding and relates to prior year finding 2021-001. Context All expenditures were approved by the payroll and finance department. The Corporation developed protocols of which efforts and expenses should be accumulated related to COVID 19 and communicated these protocols throughout the Corporation to ensure costs were being appropriately compiled. Management developed a spreadsheet to accumulate the expenditures for reporting. However, management did not maintain evidence supporting the review and approval of expenses under the grant and subsequently identified errors in the Period 1 submission. These errors were identified prior to the Period 2 submission in which the Corporation attempted to correct by restating and unintentionally duplicating the expenditures. The overstatement of expenditures had no impact on meeting the requirement to retain the funding received. Recommendation We recommend that management develop and implement effective internal controls to ensure expenditures are reviewed and approved to ensure that the report submissions are accurate. View of responsible officials There is no disagreement with the audit finding.