Finding Text
Department of Health and Human Services
Federal Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year -Period 2 TIN #736060815
Reporting
Material Weakness in Internal Control Over Compliance and Noncompliance Deemed Not Material
Criteria: 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 Authority tracked patient care revenues internally within a spreadsheet. The calculations of revenue by payor within the spreadsheet and included on the Period 2 report to HRSA, which were utilized to calculate lost revenues, contained errors.
Cause: The Authority’s internal controls in place to review the lost revenue calculation prior to finalization of the HRSA Period 2 submission did not identify errors in the calculation. Additionally, the review and approval of the report submitted to the Health Resources and Services Administration (HRSA) for Period 2 was not performed by someone other than the preparer, resulting in the errors in patient revenue by payor not being detected.
Effect: The reporting to HRSA for Period 2 contained errors in patient care revenue by payor, which are considered key line items in that report. While the result of the errors did not impact lost revenues calculated, there is a potential for similar errors to impact the lost revenue calculation. In addition, the lack of review of the report increases the possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed.
Questioned Costs: None. While there were errors in patient care revenues by payors for certain key line items, the errors did not impact the calculation of lost revenues.
Context: All key line items related to the calculation of lost revenues based on an Option 1 calculation, as defined by HRSA, were tested. Errors were identified in 8 key line items specifically related to patient care revenues by payor for two separate quarters. The errors did not impact the total revenue reported for any quarter.
Repeat Finding from Prior Years: No
Recommendation: We recommend management implement policies and procedures to ensure a complete revenue of supporting documentation and any reporting to a federal agency prior to submission by an individual separate from the preparer.
Views of Responsible Officials: Management agrees with the finding.