Finding 2022-002: Pell Grant and Direct Loan Reporting Federal Agency U.S. Department of Education Federal Program Student Financial Assistance Cluster (CFDA # 84.268, 84.063) Federal Award Year July 1, 2021 through June 30, 2022 Federal Award Numbers P268K221285; P268K226696; P063P211285 Criteria Per OMB No. 1845-0039, the University is required to submit Pell and Direct Loan disbursement records to the Common Origination and Disbursement (COD). The disbursement record reports the actual disbursement date and the amount of the disbursement. Per 34 CFR 668.164, the disbursement date is the date that the institution credits the student?s ledger account or pays the student or parent directly. As a key item to the disbursement records, the disbursement date per COD should agree to the disbursement date per the student?s ledger account. Per 2 CFR 200.303, the non-Federal entity must 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. Condition For 40 out of 40 students, the Direct Loan disbursement date per the student?s account does not agree to the disbursement date per the COD by one day. For 5 out of 40 students, the Pell Grant disbursement date per the student?s account does not agree to the disbursement date per COD by one day. Cause and Effect The University?s control for reviewing the timeliness of the information submitted for the disbursement records did not operate effectively to identify all errors. Questioned Costs None identified. Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year No. Recommendation We recommend the University enhance its control around the Direct Loan and Pell Reporting for disbursement records to ensure all reported information agrees between the student?s account ledger and the COD records. Views of Responsible Officials: See management?s corrective action plan.
Finding 2022-003: Loan Disbursement Notifications Federal Agency U.S. Department of Education Federal Program Student Financial Assistance Cluster (CFDA # 84.268) Federal Award Year July 1, 2021 through June 30, 2022 Federal Award Numbers P268K221285 Criteria Per 34 CFR section 668.165, if an institution credits a student?s account with a Direct Loan, the institution must notify the student or parent, no earlier than 30 days before the disbursement and no later than 30 days after the disbursement, in writing of the anticipated date and amount of the loan disbursement, the student?s right or parent?s right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan, and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement. Per 2 CFR 200.303, the non-Federal entity must 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. Condition For 28 out of 40 students, the federal direct loan disbursement notification was not sent to the student or parent within the required 30 days before or 30 days after the disbursement was credited to the student?s account. Cause and Effect The University?s internal controls for determining that a loan disbursement notification was sent timely for each disbursement made were not operating effectively. Accordingly, the University did not send a loan notification for disbursements within the required timeframe. Questioned Costs None identified. Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year No. Recommendation We recommend the University enhance the precision of the controls over loan disbursements to ensure that all loan disbursements through the Federal Direct Student Loan Program have a written notification sent to the student and/or parents within the required timeline of within 30 days before and 30 days after the disbursement date. Views of Responsible Officials: See management?s corrective action plan.
2022-003 Reporting Federal Agency: U.S. Department of Education Federal Program Title: Higher Education Emergency Relief Funds ALN Number: 84.425 Award Period: June 01, 2021 through May 31, 2022 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted the student, institutional, and annual reports did not have documentation of their review prior to submission. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the College did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The College did not have a process in place to ensure reports were reviewed and documentation of review was maintained. Effect: The College did not comply with ED regulations by retaining support for the information reported to ensure accuracy. Repeat finding: No Recommendation: We recommend the College review their reporting procedures to ensure all required steps are included as well as the supporting documentation to prepare the report is retained. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of responsible officials: There is no disagreement with the audit finding.
2022-003 Reporting Federal Agency: U.S. Department of Education Federal Program Title: Higher Education Emergency Relief Funds ALN Number: 84.425 Award Period: June 01, 2021 through May 31, 2022 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted the student, institutional, and annual reports did not have documentation of their review prior to submission. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the College did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The College did not have a process in place to ensure reports were reviewed and documentation of review was maintained. Effect: The College did not comply with ED regulations by retaining support for the information reported to ensure accuracy. Repeat finding: No Recommendation: We recommend the College review their reporting procedures to ensure all required steps are included as well as the supporting documentation to prepare the report is retained. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of responsible officials: There is no disagreement with the audit finding.
2022-003 Reporting Federal Agency: U.S. Department of Education Federal Program Title: Higher Education Emergency Relief Funds ALN Number: 84.425 Award Period: June 01, 2021 through May 31, 2022 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted the student, institutional, and annual reports did not have documentation of their review prior to submission. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the College did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The College did not have a process in place to ensure reports were reviewed and documentation of review was maintained. Effect: The College did not comply with ED regulations by retaining support for the information reported to ensure accuracy. Repeat finding: No Recommendation: We recommend the College review their reporting procedures to ensure all required steps are included as well as the supporting documentation to prepare the report is retained. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Loans 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work Study Program Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Condition: During our review of internal controls, we noted no documentation of review of the monthly reconciliations for Direct Loans, Pell, and SEOG. Questioned Costs: None Context: During our testing it was noted that necessary review and approval to maintain internal controls were not being done. Cause: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effect: It is possible for errors to occur and not be caught in a timely manner. Repeat Finding: Yes Auditors? Recommendation: We recommend that the University document completion of approval and reviews. Views of Responsible Officials: No Disagreement
Federal Agency: U.S. Department of Education Federal Program Title: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425 Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance ? Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted: ? For the December 31, 2021, and March 31, 2022 student quarterly reports, proper supporting documentation was not retained for the number of students paid and total amount paid and number of eligible students. ? For the December 31, 2021 annual report there was no support of the annual report saved. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the University did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The University did not have someone tracking the requirements to ensure that they posted the reporting timely and accurately. Effect: The University did not comply with ED regulations by reporting accurate information as well as retaining support for the information reported to ensure accuracy. Repeat finding: No Recommendation: We recommend the University review their reporting procedures to ensure all required steps are included as well as the supporting documentation to prepare the report is retained. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425 Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance ? Other Matters Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted: ? For the December 31, 2021, and March 31, 2022 student quarterly reports, proper supporting documentation was not retained for the number of students paid and total amount paid and number of eligible students. ? For the December 31, 2021 annual report there was no support of the annual report saved. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the University did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The University did not have someone tracking the requirements to ensure that they posted the reporting timely and accurately. Effect: The University did not comply with ED regulations by reporting accurate information as well as retaining support for the information reported to ensure accuracy. Repeat finding: No Recommendation: We recommend the University review their reporting procedures to ensure all required steps are included as well as the supporting documentation to prepare the report is retained. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must 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. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: None Context: During our testing, we noted the following exceptions: ? The Organization did not complete the indirect costs section of the annual Federal Financial Report submitted during the fiscal year. Auditor noted a total of $74,062 was drawn in indirect costs for fiscal year 2022. ? The Organization is not reporting the action in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: Yes ? 2021-003 Recommendation: ? We recommend the Organization review the instructions for completion of the federal financial reports with training provided to the program staff preparing and reviewing the federal financial reports to ensure submitted reports are complete and timely. ? Specific to special reports for FFATA, we recommend the Organization provide training on the requirements to those employees responsible for reporting the action in FSRS. Views of responsible officials: The Organization was unaware of the FFATA reporting requirement. The Organization will register and submit the FFATA. Also, the Organization failed to report the indirect costs on the FFR. The Organization has notified the responsible parties to avoid future occurrences. The FFR?s have been completed to report indirect costs separately in fiscal year 2023. The FFATA was submitted in fiscal year 2023 and will be updated yearly.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must 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. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: $1,062,184 Context: During our testing, we noted the following exception: ? The Organization did not reduce the PRF expenses claimed by the amounts reimbursed by Medicare through the cost report. Auditor calculated the average amount reimbursed by MCR and noted an average MCR reimbursement rate of 26.8% and 28.1% in fiscal years 2021 and 2020, respectively. The calculated total of costs reimbursed by Medicare through the cost report is $1,062,184. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: No. Recommendation: We recommend the Organization evaluate its financial reporting processes and controls to determine whether additional controls over the preparation of any Provider Relief Fund reports are needed to ensure the reports are prepared in line with the Provider Relief Fund guidelines. Views of responsible officials: The Organization missed reducing the costs claimed against PRF by the amounts reimbursed through the Medicare cost report. The Organization did have additional lost revenues though that would offset these costs claimed and wouldn?t result in a repayment of the funds. We would look to HRSA for guidance on how you would like us to update our Phase 1 PRF report or how you would like to see this corrected. Also, the CFO will listen to webinars to receive education for Phase IV funds that were received by the Organization to ensure compliance with the reporting requirements.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Loans 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work Study Program Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Condition: During our review of internal controls, we noted no documentation of review of the monthly reconciliations for Direct Loans, Pell, and SEOG. Questioned Costs: None Context: During our testing it was noted that necessary review and approval to maintain internal controls were not being done. Cause: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effect: It is possible for errors to occur and not be caught in a timely manner. Repeat Finding: Yes Auditors? Recommendation: We recommend that the University document completion of approval and reviews. Views of Responsible Officials: No Disagreement
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Loans 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work Study Program Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Condition: During our review of internal controls, we noted no documentation of review of the monthly reconciliations for Direct Loans, Pell, and SEOG. Questioned Costs: None Context: During our testing it was noted that necessary review and approval to maintain internal controls were not being done. Cause: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effect: It is possible for errors to occur and not be caught in a timely manner. Repeat Finding: Yes Auditors? Recommendation: We recommend that the University document completion of approval and reviews. Views of Responsible Officials: No Disagreement
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Loans 84.007 ? Federal Supplemental Educational Opportunity Grants 84.033 ? Federal Work Study Program Award Period: June 1, 2021 to May 31, 2022 Type of Finding: ? Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Condition: During our review of internal controls, we noted no documentation of review of the monthly reconciliations for Direct Loans, Pell, and SEOG. Questioned Costs: None Context: During our testing it was noted that necessary review and approval to maintain internal controls were not being done. Cause: Per the Uniform Guidance 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effect: It is possible for errors to occur and not be caught in a timely manner. Repeat Finding: Yes Auditors? Recommendation: We recommend that the University document completion of approval and reviews. Views of Responsible Officials: No Disagreement
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: Student Financial Assistance Cluster: Federal Perkins Loan Program, Assistance Listing Number (ALN) 84.038 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) 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 and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the Pell grant and U.S. Department of Education loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by the U.S. Department of Education via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record, and submit the changes electronically through the batch method, spreadsheet submittal, or the NSLDS website (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. NSLDS Enrollment Reporting Guide Chapter 1.4: At a minimum, schools are required to certify enrollment every 60 days, and respond within 15 days of the date that the NSLDS sends a roster file to the school or its third-party servicer. This requirement also applies to schools that report exclusively online. NSLDS Enrollment Reporting Guide Chapter 4.4.5: If the student enrolls in the summer term (or other non-required terms) at least half time, the student?s actual summer enrollment status is reported. If such a student subsequently withdraws from the summer term, the student?s most recent enrollment status of half time or greater should be reported throughout the remainder of the summer. If the student does not return in the fall as expected, the status must be changed to ?Withdrawn? with the date the student withdrew from the summer term as the Enrollment Status Effective Date. Condition: The University did not accurately or timely report student status changes to the NSLDS for 6 of 60 students selected for testing. Questioned costs: $0 Context: EY selected and tested 60 students from the combined population of 3,575 students that withdrew, never attended (no shows), graduated, or had changes in attendance levels during the year ended May 31, 2022. The 60 students, randomly selected, consisted of 23 student graduates, 23 student withdrawals/no shows, and 14 student changes in attendance levels. Of the 23 student graduates selected, one graduate was not reported to NSLDS as graduated. Of the 23 withdrawals/no shows, two withdrawals were reported after the 60-day reporting requirement. The withdrawals were reported to NSLDS 70 and 69 days after the respective withdrawal dates. Additionally, for three of the 23 withdrawals/no shows, the withdrawals were inaccurately reported to NSLDS because the withdrawals occurred in the Summer semester with the students previously enrolled in the Spring and registered in the Fall. Of the 14 student changes in attendance levels, all were reported accurately and timely by the University. Effect: Lack of timely and accurate enrollment reporting results in inaccurate enrollment status. A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods. Enrollment reporting in a timely and accurate manner is critical for effective management of the programs. Cause: The University did not have effective internal controls and procedures in place to ensure status changes were reported to the NSLDS accurately and timely. Identification as a repeat finding, if applicable: Yes ? 2021-001; 2020-001; 2019-002. Recommendation: The University should review and revise its internal controls and procedures surrounding the accurate and timely reporting of student status changes to the NSLDS. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: Student Financial Assistance Cluster: Federal Perkins Loan Program, Assistance Listing Number (ALN) 84.038 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) 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 and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the Pell grant and U.S. Department of Education loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by the U.S. Department of Education via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record, and submit the changes electronically through the batch method, spreadsheet submittal, or the NSLDS website (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. NSLDS Enrollment Reporting Guide Chapter 1.4: At a minimum, schools are required to certify enrollment every 60 days, and respond within 15 days of the date that the NSLDS sends a roster file to the school or its third-party servicer. This requirement also applies to schools that report exclusively online. NSLDS Enrollment Reporting Guide Chapter 4.4.5: If the student enrolls in the summer term (or other non-required terms) at least half time, the student?s actual summer enrollment status is reported. If such a student subsequently withdraws from the summer term, the student?s most recent enrollment status of half time or greater should be reported throughout the remainder of the summer. If the student does not return in the fall as expected, the status must be changed to ?Withdrawn? with the date the student withdrew from the summer term as the Enrollment Status Effective Date. Condition: The University did not accurately or timely report student status changes to the NSLDS for 6 of 60 students selected for testing. Questioned costs: $0 Context: EY selected and tested 60 students from the combined population of 3,575 students that withdrew, never attended (no shows), graduated, or had changes in attendance levels during the year ended May 31, 2022. The 60 students, randomly selected, consisted of 23 student graduates, 23 student withdrawals/no shows, and 14 student changes in attendance levels. Of the 23 student graduates selected, one graduate was not reported to NSLDS as graduated. Of the 23 withdrawals/no shows, two withdrawals were reported after the 60-day reporting requirement. The withdrawals were reported to NSLDS 70 and 69 days after the respective withdrawal dates. Additionally, for three of the 23 withdrawals/no shows, the withdrawals were inaccurately reported to NSLDS because the withdrawals occurred in the Summer semester with the students previously enrolled in the Spring and registered in the Fall. Of the 14 student changes in attendance levels, all were reported accurately and timely by the University. Effect: Lack of timely and accurate enrollment reporting results in inaccurate enrollment status. A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods. Enrollment reporting in a timely and accurate manner is critical for effective management of the programs. Cause: The University did not have effective internal controls and procedures in place to ensure status changes were reported to the NSLDS accurately and timely. Identification as a repeat finding, if applicable: Yes ? 2021-001; 2020-001; 2019-002. Recommendation: The University should review and revise its internal controls and procedures surrounding the accurate and timely reporting of student status changes to the NSLDS. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: Student Financial Assistance Cluster: Federal Perkins Loan Program, Assistance Listing Number (ALN) 84.038 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) 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 and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the Pell grant and U.S. Department of Education loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by the U.S. Department of Education via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record, and submit the changes electronically through the batch method, spreadsheet submittal, or the NSLDS website (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. NSLDS Enrollment Reporting Guide Chapter 1.4: At a minimum, schools are required to certify enrollment every 60 days, and respond within 15 days of the date that the NSLDS sends a roster file to the school or its third-party servicer. This requirement also applies to schools that report exclusively online. NSLDS Enrollment Reporting Guide Chapter 4.4.5: If the student enrolls in the summer term (or other non-required terms) at least half time, the student?s actual summer enrollment status is reported. If such a student subsequently withdraws from the summer term, the student?s most recent enrollment status of half time or greater should be reported throughout the remainder of the summer. If the student does not return in the fall as expected, the status must be changed to ?Withdrawn? with the date the student withdrew from the summer term as the Enrollment Status Effective Date. Condition: The University did not accurately or timely report student status changes to the NSLDS for 6 of 60 students selected for testing. Questioned costs: $0 Context: EY selected and tested 60 students from the combined population of 3,575 students that withdrew, never attended (no shows), graduated, or had changes in attendance levels during the year ended May 31, 2022. The 60 students, randomly selected, consisted of 23 student graduates, 23 student withdrawals/no shows, and 14 student changes in attendance levels. Of the 23 student graduates selected, one graduate was not reported to NSLDS as graduated. Of the 23 withdrawals/no shows, two withdrawals were reported after the 60-day reporting requirement. The withdrawals were reported to NSLDS 70 and 69 days after the respective withdrawal dates. Additionally, for three of the 23 withdrawals/no shows, the withdrawals were inaccurately reported to NSLDS because the withdrawals occurred in the Summer semester with the students previously enrolled in the Spring and registered in the Fall. Of the 14 student changes in attendance levels, all were reported accurately and timely by the University. Effect: Lack of timely and accurate enrollment reporting results in inaccurate enrollment status. A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods. Enrollment reporting in a timely and accurate manner is critical for effective management of the programs. Cause: The University did not have effective internal controls and procedures in place to ensure status changes were reported to the NSLDS accurately and timely. Identification as a repeat finding, if applicable: Yes ? 2021-001; 2020-001; 2019-002. Recommendation: The University should review and revise its internal controls and procedures surrounding the accurate and timely reporting of student status changes to the NSLDS. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) 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 and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) 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 and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Criteria or Requirement Per Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart D, Section 200.303), the nonfederal entity must 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. Common Origination and Disbursement (COD) System (OMB No. 1845-0039) - All schools receiving Pell grants submit Pell payment data to the Department of Education through the COD System. Schools submit Pell origination records and disbursement records to the COD System. Institutions must report student payment data within 15 calendar days after the school makes a payment; or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Schools may do this by reporting once every 15 calendar days, bi-weekly or weekly or may set up their own system to ensure that changes are reported in a timely manner. Condition Found, Including Perspective We identified 12 students in a sample of 40 that had Pell disbursements that were reported to the COD System after the required 15 day deadline (on average 26 days). Cause and Possible Asserted Effect Management?s control over reporting Pell disbursement data to the COD System timely did not operate effectively. Questioned Costs There were no questioned costs associated with this finding. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample.Repeat finding The audit finding is not a repeat of a finding in the immediately prior fiscal year. Recommendation We recommend that the College implement additional monitoring controls to ensure proper reporting of Pell disbursement data to the COD System within the required timeframe. Views of Responsible Officials Management recognizes the finding in Pell disbursement reporting to the Common Origination and Disbursement (COD) System (OMB No. 1845-0039). The COVID-19 Pandemic has presented the financial aid office with unprecedented administrative challenges, and we continue our efforts to return to pre-pandemic norms. Management would like to acknowledge the deficiency did not result in ineligible payments to students nor required the college to return any Title IV funds. The financial aid office has implemented reporting safeguards, including a secondary review of all Pell disbursements reporting prior to the COD reporting deadline, and the Associate Vice President for Financial Aid is now actively involved in ensuring timely reporting disbursements by reviewing monthly internal reports.
Criteria or Requirement Per Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart D, Section 200.303), the nonfederal entity must 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. The COVID-19 ? Higher Education Emergency Relief Fund (HEERF) participating institutions are required to comply with Quarterly Public Reporting for Student Aid Portion and Institutional Portion. Each HEERF participating institution must publicly post the information on the institution?s primary website and update no later than 10 days after the end of each calendar quarter (March 31, June 30, September 30, and December 31).Condition Found, Including Perspective During our test work over the Institutional Portion reporting, we selected December 31, 2021 and March 31, 2022 quarterly reporting. We noted that the quarterly reporting for those quarters were publicly published on the College?s website on April 26, 2022, which is after the required 10 day deadline for both quarters. During our test work over Student Aid Portion reporting, we selected December 31, 2021 and March 31, 2022 quarterly reporting. We noted that there was no evidence that the Student Aid Portion reporting for the quarter ending December 31, 2021 was publicly published. Cause and Possible Asserted Effect Management?s control over HEERF Quarterly Public Reporting did not operate effectively to ensure compliance or timely reporting. Questioned Costs There were no questioned costs associated with this finding. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The audit finding is not a repeat of a finding in the immediately prior year. Recommendation We recommend that the College implement additional monitoring controls to ensure proper reporting within the required timeframe. Views of Responsible OfficialsManagement acknowledges the finding regarding the timeliness with which the student aid and institutional portion of HEERF quarterly reports were posted on the College?s website during the period under review. During the height of the pandemic, colleges and universities were confronted with unprecedented challenges. Due to the administrative burden imposed by these challenges, the urgency to provide students with funds, and the numerous regulatory changes to eligibility requirements, reporting deficiencies arose. In addition, the staff transition during the period under review attributed to the delay in posting of the quarterly HEERF reports for the institutional portion after the required reporting deadline. However, all quarterly and annual reports for the institutional portion were posted on the management?s website prior to the end of the reporting period. Management also acknowledges the finding relating to posting of the student portion of HEERF information on the College?s website, as well as the fact that annual reports were submitted on time to the Department of Education, demonstrating our efforts in adhering to the reporting guidelines.
Criteria or Requirement Per Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart D, Section 200.303), the nonfederal entity must 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. The COVID-19 ? Higher Education Emergency Relief Fund (HEERF) participating institutions are required to comply with Quarterly Public Reporting for Student Aid Portion and Institutional Portion. Each HEERF participating institution must publicly post the information on the institution?s primary website and update no later than 10 days after the end of each calendar quarter (March 31, June 30, September 30, and December 31).Condition Found, Including Perspective During our test work over the Institutional Portion reporting, we selected December 31, 2021 and March 31, 2022 quarterly reporting. We noted that the quarterly reporting for those quarters were publicly published on the College?s website on April 26, 2022, which is after the required 10 day deadline for both quarters. During our test work over Student Aid Portion reporting, we selected December 31, 2021 and March 31, 2022 quarterly reporting. We noted that there was no evidence that the Student Aid Portion reporting for the quarter ending December 31, 2021 was publicly published. Cause and Possible Asserted Effect Management?s control over HEERF Quarterly Public Reporting did not operate effectively to ensure compliance or timely reporting. Questioned Costs There were no questioned costs associated with this finding. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The audit finding is not a repeat of a finding in the immediately prior year. Recommendation We recommend that the College implement additional monitoring controls to ensure proper reporting within the required timeframe. Views of Responsible OfficialsManagement acknowledges the finding regarding the timeliness with which the student aid and institutional portion of HEERF quarterly reports were posted on the College?s website during the period under review. During the height of the pandemic, colleges and universities were confronted with unprecedented challenges. Due to the administrative burden imposed by these challenges, the urgency to provide students with funds, and the numerous regulatory changes to eligibility requirements, reporting deficiencies arose. In addition, the staff transition during the period under review attributed to the delay in posting of the quarterly HEERF reports for the institutional portion after the required reporting deadline. However, all quarterly and annual reports for the institutional portion were posted on the management?s website prior to the end of the reporting period. Management also acknowledges the finding relating to posting of the student portion of HEERF information on the College?s website, as well as the fact that annual reports were submitted on time to the Department of Education, demonstrating our efforts in adhering to the reporting guidelines.
Criteria: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards 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 awards. In addition, 2 CFR section 200.403 requires that costs be adequately documented, among other criteria, to be allowable under federal awards. Condition: For 8 of 60 transactions tested, Orlando Shakespeare Theater, Inc. (the “Organization”) was unable to provide supporting documentation evidencing that the expenditure was incurred, allowable and within the period of performance of the Organization’s Shuttered Venue Operators Grant. The sample was not intended to be, and was not, a statistically valid sample. Cause: The inability to maintain appropriate supporting documentation was due to employee turnover during the pandemic and a lack of formal policies and procedures over expenditures incurred during a previously unforeseen time of remote working during the COVID-19 global pandemic. Effect or Potential Effect: Certain costs incurred by the Organization may be unallowable or outside the period of performance of the grant resulting in noncompliance and possible questioned costs. Recommendation: We recommend that the Organization implement policies, processes and internal controls surrounding expenditures and validate that adequate supporting documentation, including invoices and payment support, is maintained by the Organization to support compliance with grant requirements.
2022-004Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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: The Health System selected option ii to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Health System did not have a budget for the entire reporting period that was approved prior to March 27, 2020. The Health System used the corresponding months from their fiscal year budget for the periods that did not have an approved budget. In addition, the internal statements net patient revenue differed from the net patient revenue in the audited financial statement due to certain cost centers being classified differently. Finally, the Health System?s report submitted to the Department of Health and Human Services (HHS) for Period 1 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Health System did not have an internal control process in place to ensure review and approval of the Period 1 HHS report was documented. The Health System did have an approved budget prior to March 27, 2020 for fiscal year 2020, but the approved budget did not cover the entire period of availability. The difference in net patient revenue in the audited financial statements were not reconciled with the net patient revenue on the internal statements. Effect: The reporting to HHS for Period 1 was considered incorrect. The Health System did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Lost revenue differences using internal financial statements rather than net patient revenue reported on the audited financial statements differed less than $25,000. Had the Health System elected to use option iii to calculate lost revenue utilizing an alternative reasonable method, lost revenues may have been allowed. Context: Key line items were tested on the Period 1 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. In addition, we recommend that the Health System enhance internal control policies to ensure all lost revenue calculations are reviewed and approved to ensure that they are electing the appropriate methodology and in accordance with program requirements. Views of Responsible Individuals: Management agrees with the finding.
2022-005Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance 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: The Health System?s Period 1 expenditures and report to HHS included an expense that was reduced for a reimbursement rate in duplicate. Cause: Due to a clerical oversight, the Health System calculated the reimbursement rate from the total expenses, but also calculated the reimbursement on an individual expense in duplicate. Effect: There is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None reported as the amount claimed was understated. Eligible expenses on the period 1 report were understated by an amount less than $25,000. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample of 60 contained an error. All expenditures? reduction for reimbursement was recomputed from the population to arrive at the known error. Key line items on the Period 1 report were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the reduction for reimbursement of expenditures are calculated and reported correctly. Views of Responsible Individuals: Management agrees with the finding.
2022-006Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance 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: The Health System claimed expenses that were incurred prior to when the Health System began to prepare for, prevent and respond to the coronavirus. This resulted in the incorrect treatment of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1. Cause: The terms and conditions were not properly assessed to ensure claimed expenses were allowable under the federal program and claimed on the special report submitted to HHS for Period 1. Effect: There were $144,685 of expenses claimed and reported in the special report submitted to HHS for Period 1 relating to January 2020, which is prior to when the Health System began to prepare for, prevent and respond to the coronavirus. Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as there was additional lost revenue claimed in excess of $600,000 on the special report submitted to HHS for Period 1 TIN #476028103 that was tested to cover the amount of unallowed expenses. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample contained a January 2020 expenditure. All January 2020 expenditures were identified from the population to arrive at the known error. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions of the award and are properly included in the reports required to be submitted to the federal agency. We recommend management update any future special reports submitted to HHS as deemed appropriate. Views of Responsible Individuals: Management agrees with the finding.
Finding No. 2022-004 Material Weakness: Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance and Noncompliance Reporting Material Weakness in Internal Control Over Compliance and Noncompliance 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. The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for, and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 and Period 2 reporting required an organization to illustrate how PRF funds received were used. An organization was allowed to include eligible expenditures from January 1, 2020 through December 31, 2021 depending on the period reporting. Condition: During the process of identifying expenses that were incurred to prevent, prepare for, or respond to the coronavirus pandemic, management included expenses incurred in January 2020 and February 2020 which were not supported by management in relation to prepare, prevent, or respond to coronavirus as these were incurred prior to when the Hospital began to prepare for coronavirus. Cause: The Hospital?s internal control policy did not ensure that eligible expenses followed applicable reporting guidance. Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently included in eligible expenses amounts unrelated to prepare, prevent, and responding to the coronavirus which occurred during the months of January 2020 and February 2020. Effect: Management included amounts in the PRF reporting portal of $337,122 for January 2020 and February 2020 expenditures which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: None reported. The total amount reported that should have been excluded was $337,122 related to costs that were incurred from January 2020 and February 2020. This error did not result in any questioned costs as the Hospital incurred and reported additional expenses on the Total Unreimbursed Expenses Attributable to Coronavirus line item, which based on testing, resulted in sufficient expenses incurred attributable to coronavirus. As a result, there were no questioned costs. Context: A nonstatistical sample of 60 expenditures were selected for testing in which there were five errors identified for expenditures prior to when the entity began to prepare for, prevent, and respond to the coronavirus. We then used the client listing to determine the total amount of expenses reported from January 2020 and February 2020 was $337,122. The Hospital then identified the eligible expenses from the Total Unreimbursed Expenses Attributable to Coronavirus line item and additional items were selected for testing from this population. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in reporting periods defined by HRSA. Views of Responsible Officials: Management agrees with the noted finding. However, the Hospital also incurred and reported unreimbursed expenses attributable to coronavirus of $591,058 which could be used to replace the identified January 2020 and February 2020 costs unrelated to coronavirus. Management will continue to refine its processes to more diligently review expenditures to ensure only those costs incurred during the eligibility period are included in future reporting.
2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 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: The Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 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: The Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-006 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over ComplianceCriteria: 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: There was no evidence of formal review and approval over tracking of expenditures that wereclaimed for the program. In addition, there was no evidence retained that the Hospital?s special reportsubmitted to the Department of Health and Human Services for Period 1 TIN #376020408 was reviewed orapproved by an individual separate from the preparer prior to submission. The approval for individual payroll and fringe benefit expenditures was not retained in the transition to a new payroll software, and certain other expenditures did not have retained approval.Cause: The Hospital did not have an internal control process in place to ensure documentation of review and approval was retained for individual expenditures, the workpaper tracking expenditures claimed under the federal program, and the special report submitted to the Department of Health and Human Services for Period 1.Effect: The lack of adequate policies governing review, approval, and retention of documents increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely.Questioned Costs: None reported.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained.Views of Responsible Officials: Management agrees with the finding.
2022-007 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesSignificant Deficiency in Internal Control Over ComplianceCriteria: 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: The Hospital?s final expenditure listing claimed payroll costs by certain departments that worked directly with COVID patients. The general ledger report that this information was generated from reports the information by department, however the payroll register does not have departmental data. Therefore, the general ledger report was not able to tie to specific department information, but it was able to tie in total.Cause: The Hospital had multiple employees working in multiple departments during the periods claimed. The Hospital?s payroll per department was calculated by the payroll system which was subsequently replaced. In the transition to the new software, a payroll register by department that shows the exact allocation of wages to various departments was not retained.Effect: Without a payroll register by department, there is a possibility that ineligible expenditures may be claimed under the program.Questioned Costs: None reported.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that the support of payroll expenditures by department are properly retained.Views of Responsible Officials: Management agrees with the finding.
2022-004Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance 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: The Health System selected option ii to calculate lost revenue, which consists of a comparison of actual results during the period of availability to the approved budget. The Health System did not have a budget for the entire reporting period that was approved prior to March 27, 2020. The Health System used the corresponding months from their fiscal year budget for the periods that did not have an approved budget. In addition, the internal statements net patient revenue differed from the net patient revenue in the audited financial statement due to certain cost centers being classified differently. Finally, the Health System?s report submitted to the Department of Health and Human Services (HHS) for Period 1 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Health System did not have an internal control process in place to ensure review and approval of the Period 1 HHS report was documented. The Health System did have an approved budget prior to March 27, 2020 for fiscal year 2020, but the approved budget did not cover the entire period of availability. The difference in net patient revenue in the audited financial statements were not reconciled with the net patient revenue on the internal statements. Effect: The reporting to HHS for Period 1 was considered incorrect. The Health System did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Lost revenue differences using internal financial statements rather than net patient revenue reported on the audited financial statements differed less than $25,000. Had the Health System elected to use option iii to calculate lost revenue utilizing an alternative reasonable method, lost revenues may have been allowed. Context: Key line items were tested on the Period 1 HHS report. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. In addition, we recommend that the Health System enhance internal control policies to ensure all lost revenue calculations are reviewed and approved to ensure that they are electing the appropriate methodology and in accordance with program requirements. Views of Responsible Individuals: Management agrees with the finding.
2022-005Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance 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: The Health System?s Period 1 expenditures and report to HHS included an expense that was reduced for a reimbursement rate in duplicate. Cause: Due to a clerical oversight, the Health System calculated the reimbursement rate from the total expenses, but also calculated the reimbursement on an individual expense in duplicate. Effect: There is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs: None reported as the amount claimed was understated. Eligible expenses on the period 1 report were understated by an amount less than $25,000. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample of 60 contained an error. All expenditures? reduction for reimbursement was recomputed from the population to arrive at the known error. Key line items on the Period 1 report were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement procedures to ensure the reduction for reimbursement of expenditures are calculated and reported correctly. Views of Responsible Individuals: Management agrees with the finding.
2022-006Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #476028103 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance 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: The Health System claimed expenses that were incurred prior to when the Health System began to prepare for, prevent and respond to the coronavirus. This resulted in the incorrect treatment of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1. Cause: The terms and conditions were not properly assessed to ensure claimed expenses were allowable under the federal program and claimed on the special report submitted to HHS for Period 1. Effect: There were $144,685 of expenses claimed and reported in the special report submitted to HHS for Period 1 relating to January 2020, which is prior to when the Health System began to prepare for, prevent and respond to the coronavirus. Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as there was additional lost revenue claimed in excess of $600,000 on the special report submitted to HHS for Period 1 TIN #476028103 that was tested to cover the amount of unallowed expenses. Context: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $84,077 of $3,048,891 direct program expenditures. One expenditure from the sample contained a January 2020 expenditure. All January 2020 expenditures were identified from the population to arrive at the known error. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions of the award and are properly included in the reports required to be submitted to the federal agency. We recommend management update any future special reports submitted to HHS as deemed appropriate. Views of Responsible Individuals: Management agrees with the finding.
Finding No. 2022-004 Material Weakness: Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance and Noncompliance Reporting Material Weakness in Internal Control Over Compliance and Noncompliance 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. The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for, and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 and Period 2 reporting required an organization to illustrate how PRF funds received were used. An organization was allowed to include eligible expenditures from January 1, 2020 through December 31, 2021 depending on the period reporting. Condition: During the process of identifying expenses that were incurred to prevent, prepare for, or respond to the coronavirus pandemic, management included expenses incurred in January 2020 and February 2020 which were not supported by management in relation to prepare, prevent, or respond to coronavirus as these were incurred prior to when the Hospital began to prepare for coronavirus. Cause: The Hospital?s internal control policy did not ensure that eligible expenses followed applicable reporting guidance. Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently included in eligible expenses amounts unrelated to prepare, prevent, and responding to the coronavirus which occurred during the months of January 2020 and February 2020. Effect: Management included amounts in the PRF reporting portal of $337,122 for January 2020 and February 2020 expenditures which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: None reported. The total amount reported that should have been excluded was $337,122 related to costs that were incurred from January 2020 and February 2020. This error did not result in any questioned costs as the Hospital incurred and reported additional expenses on the Total Unreimbursed Expenses Attributable to Coronavirus line item, which based on testing, resulted in sufficient expenses incurred attributable to coronavirus. As a result, there were no questioned costs. Context: A nonstatistical sample of 60 expenditures were selected for testing in which there were five errors identified for expenditures prior to when the entity began to prepare for, prevent, and respond to the coronavirus. We then used the client listing to determine the total amount of expenses reported from January 2020 and February 2020 was $337,122. The Hospital then identified the eligible expenses from the Total Unreimbursed Expenses Attributable to Coronavirus line item and additional items were selected for testing from this population. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in reporting periods defined by HRSA. Views of Responsible Officials: Management agrees with the noted finding. However, the Hospital also incurred and reported unreimbursed expenses attributable to coronavirus of $591,058 which could be used to replace the identified January 2020 and February 2020 costs unrelated to coronavirus. Management will continue to refine its processes to more diligently review expenditures to ensure only those costs incurred during the eligibility period are included in future reporting.
2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 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: The Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 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: The Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.
2022-006 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over ComplianceCriteria: 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: There was no evidence of formal review and approval over tracking of expenditures that wereclaimed for the program. In addition, there was no evidence retained that the Hospital?s special reportsubmitted to the Department of Health and Human Services for Period 1 TIN #376020408 was reviewed orapproved by an individual separate from the preparer prior to submission. The approval for individual payroll and fringe benefit expenditures was not retained in the transition to a new payroll software, and certain other expenditures did not have retained approval.Cause: The Hospital did not have an internal control process in place to ensure documentation of review and approval was retained for individual expenditures, the workpaper tracking expenditures claimed under the federal program, and the special report submitted to the Department of Health and Human Services for Period 1.Effect: The lack of adequate policies governing review, approval, and retention of documents increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely.Questioned Costs: None reported.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained.Views of Responsible Officials: Management agrees with the finding.
2022-007 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesSignificant Deficiency in Internal Control Over ComplianceCriteria: 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: The Hospital?s final expenditure listing claimed payroll costs by certain departments that worked directly with COVID patients. The general ledger report that this information was generated from reports the information by department, however the payroll register does not have departmental data. Therefore, the general ledger report was not able to tie to specific department information, but it was able to tie in total.Cause: The Hospital had multiple employees working in multiple departments during the periods claimed. The Hospital?s payroll per department was calculated by the payroll system which was subsequently replaced. In the transition to the new software, a payroll register by department that shows the exact allocation of wages to various departments was not retained.Effect: Without a payroll register by department, there is a possibility that ineligible expenditures may be claimed under the program.Questioned Costs: None reported.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that the support of payroll expenditures by department are properly retained.Views of Responsible Officials: Management agrees with the finding.
Program Information: Federal Program: Provider Relief Fund (PRF) Assistance Listing Number: 93.498 Federal Agency: Department of Health & Human Services Award Year: PRF Periods 1 and 2: Funds received April 10, 2020 through December 31, 2020 Criteria or requirement: Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must 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. Activities Allowed and Unallowed and Allowable Costs (AB): Per the Terms and Conditions of the Provider Relief Fund program, as described in the July 2021 OMB Compliance Supplement, payments may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Reporting (L) - Special Reporting Under the terms and conditions of the award, Provider Relief Funds (PRF) is subject to 45 CFR section 75.302 (Financial management and standards for financial management systems). The PRF program requires special reporting through the Provider Relief Fund Reporting Portal that contains key line items containing critical information based on the period reported on. Other Provider Relief Fund Expenses for Payments Received During Payment Period for Payment Received Period is specified as a key line item. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding: For 2 of 40 samples of expenditures, the expenditure claimed represented an amount that was claimed twice by the Company in their expenditures reporting in the Provider Relief Fund portal. Additionally, Legacy claimed expenses that were duplicated within the reporting portal. The general distribution report for Legacy Health for Period 1 shows $35,760,843 in expenses applied against the PRF funds in the PRF portal report for Legacy as a consolidated entity. Separately, the stand-alone reports for targeted funds received by Emanuel Hospital & Health Center for Period 1, Legacy Silverton Medical Center for Period 1, Legacy Clinics, LLC for Period 1, and Legacy Meridian Park Hospital for Period 2 also include expenses totaling $12,291,293 that are included in the $35,760,843 listed in the consolidated report above. This results in duplicate reporting of the same expenditures. During our testing over reporting and allowability we observed the lost revenues attributable to Coronavirus were reported in both the parent entity?s PRF reports on the general distribution payments and the subsidiary entities? PRF reports on the targeted distribution payments (i.e., lost revenues were duplicated). Lost revenues shown on the subsidiary reports as available to be applied against PRF that related to lost revenues also reported in the parent entity?s report were related to Emanuel Hospital & Health Center for Period 1 in the amount of $27,106,110 and Legacy Silverton Medical Center for Period 1 in the amount of $10,269,349. Cause and possible asserted effect: Controls were not operating effectively to detect and correct duplicate expenses shown on the portal reporting between the consolidated and stand-alone subsidiary reports for targeted funds. Identification of questioned costs and how they were computed: $12,291,293, which represents the accumulation of expenses included on the consolidated and subsidiary targeted fund portal reports. Sample Statistically Valid: The sample was not intended to be, and was not, a statistically valid sample. Repeat finding from prior year: This finding is not a repeat of a finding in the immediately prior audit. Recommendation: We recommend Legacy management enhance their control process by 1) developing a methodology to identify areas within the portal reporting requirements that are inconclusive, in conflict or ambiguous, and 2) developing a process to access subject matter expertise to resolve issues identified. Views of Responsible Officials: As noted within the portal filing summary, for reporting period 1, Legacy consolidated COVID-19 expenses ($35,760,843) plus lost revenue ($150,037,450) totaled $185,798,293. Payments from the PRF totaled $89,818,954. As a result, there were sufficient qualifying lost revenues to receive and earn all PRF funds received, regardless of the questioned costs above. Therefore, management believes no repayment of PRF funds received would be required. Further, management considered the finding. Reporting for the Legacy parent reporting entity was based on the ?Post-Payment Notice of Reporting Requirements (6/11/21)?, which includes the following requirement: ?Reporting entities will submit consolidated reports.? Neither the methodology utilized by Legacy or application of the methodology advocated by KPMG result in repayment of any of the funds received from the PRF. Management is implementing a process to identify and resolve situations in which reporting requirements are inconclusive, in conflict, or ambiguous. Outside subject matter expertise will be accessed as needed.
CFDA Number, Federal Agency, and Program Name 21.027, U.S. Department of Treasury, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a) 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 During the audit of federal expenditures, it was noted that the Charter Township incorrectly reported project expenditure categories to Treasury. Questioned Costs N/A Identification of How Questioned Costs Were Computed N/A Context Project expenditure category amounts reported by the Township included $114,346 of expenditures reported as Administrative Expenses and Public Sector Capacity: Administrative Needs. The correct categorization of these costs was Public Sector Workforce: Payroll and Benefits for Public Health, Public Safety, or Human Services Workers Cause and Effect The Charter Township's process in place to review reports submitted to Treasury was not effective in identifying the reporting error. This resulted in the Charter Township incorrectly reporting expenditures to Treasury. Recommendation We recommend the Charter Township implement another layer of review to ensure reported costs are accurate. Views of Responsible Officials and Planned Corrective Actions The Charter Township agrees with the finding and will put procedures into place to ensure appropriate layers of review are performed when reporting expenditures.
Criteria ? 2 CFR Section 200.303 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes regulations, and the terms and conditions of federal awards. The Organization is responsible for tracking total federal funds spent by fiscal year and making the determination whether a Single Audit is required. Condition and Context ? Management?s spreadsheet for tracking federal grants subject to Uniform Guidance Single Audit and related expenditures for the fiscal year did not include all grants subject to Single Audit. As a result, management initially determined that the Organization was below the threshold for Single Audit for the year ended March 31, 2022. Audit procedures found additional grants with expenditures during the fiscal year that were subject to Single Audit. These additional grants put the Organization over the Single Audit expenditure threshold of $750,000. Cause ? A lack of internal controls to review the tracking schedule for completeness and insufficient review of grants for the presence of federal funding. Effect ? Had audit procedures not found the additional grants, the Organization would not have met its requirement for a Single Audit for the year ended March 31, 2022. Recommendations ? As agreements are awarded, the Organization should analyze them for the presence of federal funding. In many instances there is a mix and the Organization should review the agreement for clarification of funding allocations. If unclear, the Organization should work with the grant?s administrator at the funder to determine the source of the funds. If not in the agreement, the Organization should also work with the funder to identify the federal CFDA number the federal funds fall under. The Organization should ensure all identified federal grants make it to the tracking spreadsheet. Management should strengthen its review of that tracking document to ensure it includes all federal grants with expenditures subject to Single Audit each fiscal year. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding. AYCC has taken steps to strengthen fiscal oversight and tracking of federal grants subject to meet Uniform Guidance. These steps include hiring a new Chief Financial Officer with significant grant management and audit experience. Additionally, cross training staff to increase skills and knowledge surrounding the receipt, use, and tracking of federal grants. These steps combined with updated internal controls, improved systems and collaboration between the finance department and the grant department will remedy this finding and prevent further findings in the future.
Criteria ? 2 CFR Section 200.303 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes regulations, and the terms and conditions of federal awards. The Organization is responsible for tracking total federal funds spent by fiscal year and making the determination whether a Single Audit is required. Condition and Context ? Management?s spreadsheet for tracking federal grants subject to Uniform Guidance Single Audit and related expenditures for the fiscal year did not include all grants subject to Single Audit. As a result, management initially determined that the Organization was below the threshold for Single Audit for the year ended March 31, 2022. Audit procedures found additional grants with expenditures during the fiscal year that were subject to Single Audit. These additional grants put the Organization over the Single Audit expenditure threshold of $750,000. Cause ? A lack of internal controls to review the tracking schedule for completeness and insufficient review of grants for the presence of federal funding. Effect ? Had audit procedures not found the additional grants, the Organization would not have met its requirement for a Single Audit for the year ended March 31, 2022. Recommendations ? As agreements are awarded, the Organization should analyze them for the presence of federal funding. In many instances there is a mix and the Organization should review the agreement for clarification of funding allocations. If unclear, the Organization should work with the grant?s administrator at the funder to determine the source of the funds. If not in the agreement, the Organization should also work with the funder to identify the federal CFDA number the federal funds fall under. The Organization should ensure all identified federal grants make it to the tracking spreadsheet. Management should strengthen its review of that tracking document to ensure it includes all federal grants with expenditures subject to Single Audit each fiscal year. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding. AYCC has taken steps to strengthen fiscal oversight and tracking of federal grants subject to meet Uniform Guidance. These steps include hiring a new Chief Financial Officer with significant grant management and audit experience. Additionally, cross training staff to increase skills and knowledge surrounding the receipt, use, and tracking of federal grants. These steps combined with updated internal controls, improved systems and collaboration between the finance department and the grant department will remedy this finding and prevent further findings in the future.
Federal Agency: United States Department of Agriculture Federal Programs: Child and Adult Care Food Program (10.558) Federal Award Numbers: 202120N105044, 202121N115044, 202222N115044, 202221N115044, 202121N202044, 202120N202044, 202121N109944, 202120N109944, 202121N119944, 202121H170644, 202222N202044, 202221N202044, 202222N119944, 202221N119944 Federal Award Years: 2021 and 2022 State Agency: Department of Health Reference: 2022-003 Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.332(d) states all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that he subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. Additionally, 2 CFR 200.303(a) states the nonfederal entity must Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition For 3 of 40 subrecipients selected, the Department did not review the cases by the scheduled due date for the single audit reports as required in accordance with 2 CFR 200.332(d). The Department of Health (the Department) did not have effective internal controls in place to ensure that all required single audits of the program?s subrecipients were reviewed, followed-up, or appropriate action was taken and as necessary issued a management decision pertaining to the audit finding in accordance with 2 CFR 200, as applicable. The Department maintains an internal clearinghouse tracker (the tracker) to track the subrecipients single audit status. The tracker tracks subrecipients that are exempt from single audit requirements as well as the status and follow-up required for the subrecipients with single audits. Cause The condition is due to DOH Audit Clearinghouse personnel not operating as intended, due to COVID-19 personnel reassignments, to ensure the timely review of all single audit reports for all subrecipients receiving federal funding from the Department. Possible Asserted Effect Failure to properly obtain and review subrecipient single audit reports may result in the use of federal funding not being in compliance with federal statues, regulations, and the terms and conditions of subawards. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding for the Department was included in the 2019 Single Audit Report as finding number 2019 032 at pages 90?92. Recommendation We recommend the Department to continue working on the implementation of its replacement computerized system to (1) identify all subrecipients required to have a single audit, (2) ensure that sanctions are imposed in a timely manner for subrecipients that do not submit timely single audit reports, and (3) issue management decisions within six months for all single audit reports that contain findings relevant to the Department?s programs. In the interim, we recommend that manual internal control procedures be implemented by the Department to ensure that all subrecipients that require a single audit to be completed submit the report on a timely basis and, if applicable, respond to management decision letters be issued by the Department. Views of Responsible Officials Recommendation accepted. Reference the corrective action plan for further details.
Federal Agency: United States Department of Agriculture Federal Programs: Child and Adult Care Food Program (10.558) Federal Award Numbers: 202120N105044, 202121N115044, 202222N115044, 202221N115044, 202121N202044, 202120N202044, 202121N109944, 202120N109944, 202121N119944, 202121H170644, 202222N202044, 202221N202044, 202222N119944, 202221N119944 Federal Award Years: 2021 and 2022 State Agency: Department of Health Reference: 2022-003 Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.332(d) states all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that he subaward is used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: (1) Reviewing financial and performance reports required by the pass-through entity. (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and other means. (3) Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. Additionally, 2 CFR 200.303(a) states the nonfederal entity must Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition For 3 of 40 subrecipients selected, the Department did not review the cases by the scheduled due date for the single audit reports as required in accordance with 2 CFR 200.332(d). The Department of Health (the Department) did not have effective internal controls in place to ensure that all required single audits of the program?s subrecipients were reviewed, followed-up, or appropriate action was taken and as necessary issued a management decision pertaining to the audit finding in accordance with 2 CFR 200, as applicable. The Department maintains an internal clearinghouse tracker (the tracker) to track the subrecipients single audit status. The tracker tracks subrecipients that are exempt from single audit requirements as well as the status and follow-up required for the subrecipients with single audits. Cause The condition is due to DOH Audit Clearinghouse personnel not operating as intended, due to COVID-19 personnel reassignments, to ensure the timely review of all single audit reports for all subrecipients receiving federal funding from the Department. Possible Asserted Effect Failure to properly obtain and review subrecipient single audit reports may result in the use of federal funding not being in compliance with federal statues, regulations, and the terms and conditions of subawards. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding for the Department was included in the 2019 Single Audit Report as finding number 2019 032 at pages 90?92. Recommendation We recommend the Department to continue working on the implementation of its replacement computerized system to (1) identify all subrecipients required to have a single audit, (2) ensure that sanctions are imposed in a timely manner for subrecipients that do not submit timely single audit reports, and (3) issue management decisions within six months for all single audit reports that contain findings relevant to the Department?s programs. In the interim, we recommend that manual internal control procedures be implemented by the Department to ensure that all subrecipients that require a single audit to be completed submit the report on a timely basis and, if applicable, respond to management decision letters be issued by the Department. Views of Responsible Officials Recommendation accepted. Reference the corrective action plan for further details.
Federal Agency: United States Department of Education Federal Program: Title I Grants to Local Educational Agencies (84.010) Federal Award Numbers: S010A180032, S010A190032, S010A200032, S010A210032 Federal Award Years: 2018, 2019, 2020, 2021 State Agency: State Education Department Reference: 2022 007 Criteria 20 U.S. Code Section 6311 (20 USC 6311 or ESEA), State plans, part (b)(2)(A) requires each State plan to demonstrate that the State educational agency (SEA), in consultation with local educational agencies (LEAs), has implemented a set of high-quality student academic assessments in mathematics, reading or language arts, and science. Further, 20 USC 6311(b)(2)(B)(iii) and requires the assessment under subparagraph (A) to be used for purposes for which such assessments are valid and reliable, consistent with relevant, nationally recognized professional and technical testing standards, objectively measure academic achievement, knowledge, and skills, and be tests that do not evaluate or assess personal or family beliefs and attitudes, or publicly disclose personally identifiable information. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Audits, section 200.303(a) states the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 State Education Department (the Department) policies and procedures require that each LEA provide to the Office of State Assessment (OSA) at the Department a completed exam storage certificate from every school that administers academic assessments in mathematics, reading or language arts, and science. This certification includes an attestation from the school of the LEA related to maintain the security of the assessments. The certification is also required to be signed by the Principal of the school attesting to the stated procedures. For 1 of 40 LEAs selected for testing, the exam storage certificate was not signed by the Principal. Cause The condition found is due to the control not operating effectively ensuring all exam certificates are signed before acceptance by the Department. Possible Asserted Effect Failure to ensure certifications from the schools are signed by the Principal may result in the inability to ensure an assessment system is maintained that is valid, reliable, and consistent with relevant professional and technical standards. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend that the Department enhance its policies and procedures to ensure attestation certificates are reviewed by the Department to ensure they are properly completed and have all required signatures and, if any required information is missing, appropriate follow-ups are made with districts to ensure compliance with the federal statutes, regulations, and terms and conditions of federal awards. Views of Responsible Officials Recommendation accepted. Reference the corrective action plan for further details.
Department of Health and Human Services Federal Financial Assistance Listing / CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year- Period 1 TIN #38-3807713 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance 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 terms and conditions of the federal award. Condition: The Medical Center tracked patient care revenues internally within a spreadsheet. The revenues included on the spreadsheet and the Period 1 report to HRSA, which were utilized to calculate lost revenues, contained an error. Cause: The Medical Center?s internal control to review and approve accurate patient care revenues, which were utilized to calculate lost revenues, did not identify and correct the errors included in the report submitted to HRSA for Period 1 on a timely manner. Effect: The reporting to HRSA for Period 1 included errors in the reporting of patient care revenue and lost revenues. The result of the errors was an increase in eligible lost revenues available under the program. Questioned Costs: None. While there were errors identified on the Period 1 report to HRSA, the result was an increase in eligible lost revenues under the program. Context: All 10 key line items related to the calculation of lost revenues attributable to coronavirus based on an Option 1 ? 2019 Actuals calculation were tested. The Medical Center did not reflect adjustments required as a result of the audit of the fiscal year 2020 financial statements. The adjustments reduced patient care revenue by $433,089 and potentially impact up to 4 key line items. Ultimately, the impact of correcting patient care revenues for the audit adjustments is expected to increase lost revenues. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center modify internal control policies to ensure any errors in the schedule or the report are identified prior to reporting. The patient care revenues reported should include all audit and other adjustments that could have an impact on the calculation of lost revenues. Views of Responsible Officials: Management agrees with the finding.
Department of Health and Human Services Federal Financial Assistance Listing / CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year- Period 1 TIN #38-3807713 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance 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 terms and conditions of the federal award. Condition: The Medical Center tracked eligible expenses internally within a spreadsheet. The spreadsheet included errors in the calculation of allowable expenditures, which were included on the Period 1 report to the Health Resources and Services Administration (HRSA). Cause: The Medical Center?s internal control to review and approve eligible expenditures did not identify and correct the errors included in the report submitted to HRSA for Period 1 on a timely manner. Effect: The reporting to HRSA for Period 1 included errors in the reporting of expenses. The result of the errors was an increase in eligible expenditures under the program. Questioned Costs: None. While there were errors identified on the Period 1 report to HRSA, the result was an increase in eligible expenditures under the program. Context: The Total Other Provider Relief Fund Expenses amount on the Period 1 report to HRSA agreed to an underlying schedule of expenses. A sample of 25 expenditures out of a population of 123 were tested. There were errors in 21 items tested. After updating the calculations to correct the errors identified, the result was an understatement of allowable expenses available to include on the Period 1 report to HRSA. Repeat Finding from Prior Years: No Recommendation: We recommend the Medical Center modify internal control policies to ensure any errors in the schedule or the report are identified prior to reporting. The expenses claimed should be based on accurate calculations and underlying data. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing Number: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not Applicable Award Number/Year: Not Applicable / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Condition/Context: For the reports tested, the Company excluded from patient care revenue the amount attributable to independent living and assisted living related services provided to residents. The Company also inadvertently used data from the wrong period when preparing the lost revenue calculation. As a result of these adjustments, the lost revenue increased from $970,102 to $1,977,744. Additionally, the reports tested did not contain a documented review and approval of the reports prior to submission. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with the established HHS Reporting Requirements. Questioned Costs: None reported. Cause: An oversight by management resulted in using data from the wrong period when preparing their lost revenue calculation. In addition, management believed that the most appropriate option to select was Option i, not Option iii, based on their interpretation of the guidance. Recommendation: We recommend that management review and update, as needed, their procedure for completion of the reporting to ensure that a review and approval of such reporting is completed and documented prior to submission. Additionally, we recommend that management change their selected reporting option from Option i to Option iii in the next required submission, if revenue attributable to independent living related services will continue to be excluded from patient care revenues. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is responsible for reporting will remain current on compliance requirements and review final reports and the related inputs prior to submission. Specifically, the Company will verify Residential Living (IL) revenues and Amortization Income are included in the lost revenue calculation.
Finding 2022-002 - Significant Deficiency in Internal Control - Activities Allowed and Unallowed; Allowable Costs/Cost Principles Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Agency: Not applicable Award Number/Year: N/A / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Provider Relief Fund (PRF) payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by HHS. Activities allowed have been defined as health care related expenses used to prevent, prepare for, and respond to coronavirus or lost revenues that are attributable to coronavirus. Condition/Context: A sample of 40 items were selected for testing. During our testing, we noted one item selected for testing that was deemed an unallowable expense as it was not used to prevent, prepare for, and respond to coronavirus. This was not a statistically valid sample. Effect: There were costs charged to the program that were for unallowable purposes. Questioned Costs: $40,323 related to the items that were not clearly identified as being used to prevent, prepare for, or respond to coronavirus, and the invoice that did not contain any supporting documentation. Cause: The Company lacked formal approved policies and procedures related to the administration of the award. Recommendation: We recommend that management develop and implement formal policies and procedures for administration of the federal award program that includes assigning an individual with the appropriate skills, knowledge, and expertise of the award to review and approve expenditures prior to being allocated to the program. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is reviewing and approving invoices has the appropriate skill set to ensure costs that are incurred are being used to prevent, prepare for, or respond to the coronavirus.
Identifying Number: 2022-006 Information on the Federal Program: Federal Assistance Listing #93.498, Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution. Criteria or Specific Requirement: Under Uniform Guidance, effective control and accountability must be maintained for expenses used to prevent, prepare for, and respond to COVID-19. Grantee must adequately safeguard all such property and must provide assurance that it is used solely for authorized purposes. Grantee must also have systems in place that provide reasonable assurance that the information is accurate, allowable and compliant with the terms and conditions of the agreement. 2 CFR 200.303. Condition: The Organization does not have adequate controls to provide reasonable assurance that expenditures reported as qualifying grant expenditures are allowable and compliant with the terms and conditions of the agreements. Cause: Grant agreements are reviewed for allowable and unallowable costs and for period of availability. Chief Financial Officer reviews and approves the expenditure schedules before reports are submitted. However, the review process is not consistently documented, and therefore, controls are not operating effectively. Questioned Costs: None. Context: There was no documented review on any of the expenditure submissions, therefore, this is a systemic problem. All submissions were reviewed and therefore, population was statistically valid. Repeat Finding: No. Recommendation: A formal process should be implemented and placed in service to ensure the review process of the reported grant expenditures is documented. Views of Responsible Officials: See Corrective Action Plan.