Finding Text
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 3 and Period 4 TIN #382628943 and TIN #381649577
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 Corporation’s final lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program did not agree to the amount claimed in the report submitted to the Department of Health and Human Services for Period 3 and Period 4. Additionally, the Corporation’s total net patient care revenues did not agree to the amount in the report submitted to the Department of Health and Human Services for Period 4.
Cause: The Corporation recalculated lost revenue and noted multiple adjustments to the amount that could be claimed, as well as the Corporation reported revenue amounts that did not accurately reflect the net patient care revenues reported on the audited financial statements.
Effect: The lost revenue difference in what was accurately calculated compared to what was reported led to an incorrect filing and a claim of more support for lost revenue than was needed. Additionally, the revenue difference in what was reported on the audited financial statements compared to what was reported led to an incorrect filing of total net patient care revenues.
Questioned Costs: None reported.
Context: Lost revenue reported to the Department of Health and Human Services totaled $3,278,318. After corrections were made to the lost revenue support calculation, lost revenues should have been $3,161,203 for a difference of $117,115. Additionally, revenues reported to the Department of Health and Human Services compared to the audited financial statements differed by $1,957,103.
Repeat Finding from Prior Years: Yes, Finding 2021-004
Recommendation: We recommend that management reviewed their process and procedures to include monitoring over amounts reported relating to total revenues, lost revenue amounts and the related calculation.
Views of Responsible Officials: Management agrees with the finding.