Finding Text
Department of Homeland Security
Federal Financial Assistance Listing #97.036
COVID‐19 Disaster Grants – Public Assistance
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance and 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: Our testing identified eleven instances where contract labor costs were over claimed under the program due to a calculation error. Monument Health’s methodology for identifying contract labor attributable to COVID to be based upon identifying total contact labor and multiplying by the percentage of COVID patient days as a percentage of total patient days. The methodology also identified certain cost centers were to be excluded from the calculation, including behavioral health and med/surg nursing. Based upon review of management’s allocation percentage, it was noted the behavioral health and med/surg nursing COVID patient days were included within the total COVID patient days; therefore, a higher percentage of COVID patient days to total patient days was calculated. The calculation percentage was then utilized to calculate contract labor attributable to COVID for contract labor costs identified from July 2, 2022 through May 11, 2023.
Cause: The review process did not identify the behavioral health and med/surg nursing COVID patient days being improperly included within the calculation of contract labor attributable to COVID.
Effect: Monument Health’s control did not detect or correct the calculation error identified, which resulted in expenditures being claimed under the federal program that may be unallowable and a reasonable possibility that Monument Health would not be able to detect and correct noncompliance in a timely manner.
Questioned Costs: There are questioned costs in the amount of $58,985.
Context: A non‐statistical sample of 60 out of 2,565 total transactions were selected for testing, which accounted for $178,483 of $10,295,993 of federal program expenditures. In addition, five individually significant items were selected for testing which accounted for $1,066,229 of federal program expenditures. Testing was also performed over the calculation of contract labor attributable to COVID patient days as a percentage of total patient days for the period from July 1, 2021 to July 1, 2022 and from July 2, 2022 to May 11, 2023.
Repeat Finding from Prior Year: No
Recommendation: We recommend Monument Health review and strengthen the controls surrounding the calculations of expenditures being claimed under the grant.
Views of Responsible Officials: Management agrees with the finding.