Finding 2022-001: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Noncompliance over activities allowed or unallowed, allowable costs/cost principles, and period of performance related to amounts reimbursed for project worksheets. During the cou...
Finding 2022-001: Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Noncompliance over activities allowed or unallowed, allowable costs/cost principles, and period of performance related to amounts reimbursed for project worksheets. During the course of the Ochsner Clinic Foundation Uniform Guidance (UG) Audit for the Year Ended December 31, 2022, EY identified the following finding, as reported in the Schedule of Findings and Questioned Costs: Finding 2022-001 - Noncompliance over activities allowed or unallowed, allowable costs/cost principles, and period of performance related to amounts reimbursed for project worksheets. This finding is associated with application numbers PA-06-LA-4611-PW-01437 and PA-06-LA-4611-PW-01457. Both of these Project Worksheets (PWs) are for external security services that Ochsner procured in the aftermath of Hurricane Ida. These PWs included a population of 130 expenditures (invoices) for a total value of $923,105 (total value factoring in the cost share was $888,900). FEMA obligated these PWs and payment was remitted to Ochsner (via GOHSEP) for the full cost share amount of $888,900. As part of their testing over activities allowed or unallowed, allowable costs/cost principles, and period of performance, EY selected a sample of 45 items from this population ? 21 for testing over activities allowed or unallowed and allowable costs/cost principals and 24 for testing over period of performance. Through their testing, EY identified certain expenditures in the sample that were not reduced for all applicable credits (i.e., the vendor provided a credit back to Ochsner for a previously paid invoice). As a result of these items identified in the sample, Management evaluated the entire population of expenditures, and identified $99,285 as the difference between the submitted expenditures value to FEMA and the expenditures value after reducing for all applicable vendor credits. Ochsner did not identify these discrepancies when the PWs were filed with FEMA because the vendor invoices were used as the basis for the estimate of the claims, which is consistent with FEMA?s requirements. These vendor invoices reflected the full amounts billed by the vendor and did not reflect any credits that ultimately resulted in lesser amounts being remitted to the vendor at time of payment. The discrepancies that EY identified during the UG audit would have been identified, as is usually done, by either Ochsner or by FEMA / GOHSEP during the normal closeout process for these PWs, as discussed within the Public Assistance Program and Policy Guide (Version 4, Effective June 1, 2020) - Chapter 12: Final Reconciliation and Closeout. As part of this standard process, Ochsner will be required to provide proof of payment to FEMA / GOHSEP as part of the closeout process, at which time these discrepancies would have been identified. In order to cure this finding, Ochsner will reach out to FEMA / GOHSEP to self-report the issue and ask that these PWs be moved to closeout (this can be done because both PWs have been paid in full). Ochsner will also work with FEMA / GOHSEP to refund the total overpayment of $99,285 ? either via direct payment or reduction of future reimbursement under Ochsner?s other outstanding PWs with FEMA for COVID-19 and Hurricane Ida. For future FEMA claims, Ochsner will continue to work to ensure that PWs are reduced for all applicable credits using the most accurate information available ? either at the time the PWs are submitted or during closeout. Responsible Official: Scott Whitfield, Ochsner Assistant Vice President - Treasury Anticipated Completion Date: December 31, 2023