Finding 1095806 (2022-005)

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 4 TIN# 455563741 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Confluence Health must establish and maintain effective internal control over federal awards that provides reasonable assurance that Confluence Health is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. For the calculation of lost revenues, Confluence Health used gross charges to calculate lost revenue. Condition: The amounts reported for net patient revenue were based on gross charges and did not agree to the supporting documentation provided. Cause: Confluence Health did not have an internal control process in place to ensure the accuracy of the reporting key line items. Effect: There was no effect on the amount of lost revenue applied against the funding received in the current period, however there were errors in the key line items reported. On a consolidated level, lost revenue calculated using net patient revenue would have resulted in $64,525,051 in lost revenues, which exceeds the amount claimed in prior periods of $11,480,727. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend that management review the calculation methodology for lost revenues and ensure the amounts used for actual revenues agrees to the amounts presented in the financial statements. Views of Responsible Officials: Management agrees with the finding.