Finding Text
Department of Health and Human Services
Federal Assistance Listing #93.498
COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 4 TIN #421030129
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 Hospital did not retain evidence of the review and approval of the expenditure listing and lost
revenue calculation by a separate individual outside of the preparer. In addition, The Hospital’s special report
submitted to the Department of Health and Human Services for Period 4 TIN #421030129 did not have evidence
that it was reviewed and approved by a separate individual outside of the preparer.
Cause: The Hospital did not have an internal control process in place to ensure a secondary review and approval
of the expenditure listing, lost revenue calculation, and report submitted to the Department of Health and
Human Services for Period 4 was documented.
Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost
revenue may be claimed under the program and the special report might not be accurately completed.
Questioned Costs: None reported.
Context: A nonstatistical sample of 41 expenditures were selected for testing, which accounted for $971,367 of
$1,077,594 direct program expenditures. The entire lost revenue calculation was tested, and key line items were
tested on the Period 4 HHS report.
Repeat Finding from Prior Years: Yes
Recommendation: We recommend the Hospital implement a control process which includes a secondary review
and approval of the expenditure listing and lost revenue calculation and a secondary review and approval of the
required reports to be submitted to the federal agency be documented.
Views of Responsible Officials: Management agrees with the finding.