Finding 1120535 (2023-002)

Finding #2023-002 Grantor: U.S. Department of Homeland Security Federal Program Name: Pass-through from the State of Connecticut Department For Emergency Services & Public Protection; FEMA - COVID Testing reimbursement Assistance Listing Number: 97.036 Criteria and Condition Under the Stafford Act, the Federal Emergency Management Agency (FEMA) cannot duplicate funding for any cost for which there is another funding source. Other funding sources may include Medicare/Medicaid, patient health insurance, or direct payment for services. Context In response to an inquiry on behalf of FEMA Region 1 Sustained Operations Unit, the University was asked to confirm whether it collected patient care revenue for medical care expenses submitted to FEMA for reimbursement. During the post obligation reconciliation review of emergency protective measures costs, the University determined that one of the invoices for COVID testing supplies submitted with the FEMA project worksheet was also charged to patients as a direct payment for services. The University formally amended the FEMA project and reduced the cost of materials for this invoice. Cause During the closure of the region’s COVID-19 Public Assistance grant program, FEMA requested additional financial data to complete the Patient Care Revenue Duplication of Benefits (DOB) review. After a comprehensive review of program expenses, the University identified an invoice that was charged to patients as direct payment for services and submitted for FEMA reimbursement. Potential Effect Failure to properly evaluate allowable costs exposes the institution to the risk of regulatory sanctions, which could include the reduction of program funding, program suspension as well as the return of the unallowable costs. Questioned Costs The total cost of the invoice submitted to FEMA in error was $1,093,848. The amount of the invoice was subsequently returned to the state of Connecticut after the project worksheet was formally amended. Recommendation It is recommended that the University implement a process whereby management reviews federal award project worksheets prior to final submission to FEMA in order to identify any disallowed costs in a timely manner. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and the reader’s attention is directed to the corrective action plan.