Finding Text
BETH ISRAEL LAHEY HEALTH, INC. AND AFFILIATES
Schedule of Findings and Questioned Costs Year ended September 30, 2023
Finding 2023-003 – Reporting
Program: Provider Relief Fund and American Rescue Plan
Federal Agency: Health Resources and Services Administration
Assistance Listing Number: 93.498
Criteria:
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart F – Audit Requirements §200.510 requires the auditee to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502. The Uniform Guidance requires the auditor to determine whether the auditee’s schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the audited entity’s financial statements as a whole. In addition, the Uniform Guidance places the responsibility for identifying major programs on the auditor and the schedule of expenditures of federal awards serves as the primary basis for the auditor’s major program determination. Therefore, appropriate major program determination by the auditor is dependent on the accuracy and completeness of the information in the schedule of expenditures of federal awards.
Condition:
In preparation of the schedule of expenditures for federal awards (SEFA) management did not record the Provider Relief and American Rescue Plan expenditures on the SEFA which resulted in the SEFA being understated by $19,062,787.
We deemed this to be a material weakness in internal controls.
Cause:
BILH did not have an adequately designed internal control to identify the error in federal awards expended as such, the amount of the errors could have been greater and not detected by BILH’s control environment.
Possible Asserted Effect:
Potential misstatement to the schedule of expenditures of federal awards.
Questioned Costs:
None noted
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Identification of Whether the Audit Finding was a Repeat Finding:
This is a repeat finding.
Recommendation:
We recommend that BILH implement a more thorough and detailed process for preparing and reviewing the SEFA to identify adjustments that could result in a misstatement of the SEFA. This should include a formalized and detailed review of the SEFA and a reconciliation to the general ledger and financial statements by someone other than the preparer.
Views of Responsible Officials:
Management agrees with the recommendation and moving forward, BILH will centralize the compilation of the SEFA, along with conducting periodic reconciliations between the schedule, the general ledger and supporting documentation. Management will also utilize its new accounting system to track all federal funding by requiring the appropriate worktags be utilized when recording such transactions, allowing for accurate reporting. Lastly, management will require at least two reviews of the SEFA.
• Management will have training sessions with the Finance staff on the use of worktags when recording federal funding.
• A new position has been created, Director of Technical Accounting, who will be responsible for compiling the SEFA and ensuring accuracy of the filing, with sign off by department managers who are submitting information
• Director of Research Finance will review initial draft of SEFA for completeness and accuracy
• VP of Revenue and Reimbursement will review the initial draft of SEFA for completeness and accuracy
• VP of System Services Accounting and Finance will final review for completeness and accuracy Views of Responsible Officials Responsible Individual: Katherine Bacher, VP of System Services
Accounting and Finance Contact Information: Katherine.bacher@bilh.org; 617-278-7059 Expected Completion Date: June 30, 2025
Status of Completion: In process