Finding 1097143 (2023-005)

Finding Number 2023-005 – Inaccurate Tracking and Reporting of Federal Expenditures Federal Program Name COVID-19 Provider Relief Fund CFDA # 93.498 Federal Agency Department of Health and Human Services Criteria The Corporation is responsible for determining whether an expense is eligible for reimbursement through the Provider Relief Fund. To be considered an allowable expense under the Provider Relief Fund, the expense must be used to prevent, prepare for, and respond to coronavirus. In addition, the Corporation is required to maintain adequate documentation to substantiate that these funds were used for health care-related expenses attributable to coronavirus or COVID-19, and that those expenses were not reimbursed from other sources and other sources were not obligated to reimburse them. At the end of the reporting period, the Corporation is required to submit a report to the Health Resources & Services Administration (HRSA) indicating how the Provider Relief Funds were spent and in what timeframe under the prescribed period of availability. Condition During the compliance testing of the Uniform Guidance “Allowable Costs/Cost Principles” and “Reporting” requirements, we noted the following exceptions were noted regarding the initial report of expenditures reported to HRSA for period 5: • There were no amounts indicated as being spent between January 1, 2020 through June 30, 2022. • The report to HRSA indicated that $1,461,109 was spent during the fiscal year 2023 however only $558,598 was allocated to Provider Relief Funds on the Corporations general ledger. • The amounts indicated on the report to HRSA as being qualified expenditures did not appear to have been based on specific needs to prevent, prepare for and respond to coronavirus: o There was not a clear cost allocation documented to allocate items such as mortgage/rent, insurance, utilities or other general administration. o Personnel costs and related fringe benefits appeared to be remaining amounts not already reimbursed by other grants/programs rather than based on time spent specific to coronavirus. o Supplies submitted were not clearly identifiable as necessary to prevent, prepare for and respond to coronavirus. Condition Upon notification of the above compliance issues, management provided an updated detail of expenses incurred in the period of availability (January 1, 2020 through June 30, 2023) indicating a total of $1,405,474 spent on qualified expenditures during period 5. This detail included a cost allocation based on square footage dedicated to coronavirus areas of each facility to determine cost allocation of the administration/overhead amounts. The new population was sampled and we determined the following items to be ineligible: • We determined that costs from April 2020 through April 2021 of $283,525 should be excluded as they appeared to have been submitted as support for Period 1. • We determined that equipment of $51,794 was excluded as it was found to have been reimbursed by another funding source. • We excluded $407,277 in personnel and fringe benefits as they were not clearly identifiable as related to the prevention of or preparation for coronavirus. Most of the Corporations personnel costs are covered by the Health Center Program. Questioned Costs: Total costs of $1,461,109 submitted to HRSA could not be substantiated in the period of availability. Management subsequently identified and documented $662,878 of expenses as qualifying expenditures that have not been submitted to HRSA. Context The Corporation received $1,461,109 in federal Provider Relief Funds in period 5. The federal funds are considered available for expenses incurred between January 1, 2020 through June 30, 2023 with reports indicating how it was spent due to HRSA by September 30, 2023. The report does not include an option to amend or correct so it is important to ensure the initial report is accurate. Cause Management did not have a clear understanding of the requirements for use of Provider Relief Funds. In addition, expenditures were not tracked timely that were directly related to the preparation for and prevention of coronavirus. Effect Lack of effective understanding of grant and program requirements resulted in unintentional errors that may not be detected in a timely manner by employees in the normal course of performing their assigned duties and result in lost funding or return of grant funds. Recommendation Management should initiate conversation with a HRSA representative immediately to implement a corrective action plan including having the updated list of eligible expenditures and support readily available for audit by the oversight agency. Management’s Response Management agrees with the finding.