Finding 1147669 (2023-002)

Repeat finding of 2022-002 Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2022/2023 Compliance Requirement: Reporting Questioned Costs: Not applicable Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which requires an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The Organization did not complete the PRF Periods 4 and 5 reporting in accordance with the U.S. Department of Health and Human Services guidance. The Organization did not enter the correct amounts from its data supporting COVID related expenses and lost revenues for all quarters. The adjustments needed within the PRF reports to correct the errors noted for PRF Periods 4 and 5 are as follows: (1) COVID related expenses for the period of availability should increase from $7,259,377 to $8,028,744; (2) lost revenues for the period of availability should decrease from $45,384,311 to $12,691,954 and (3) unused lost revenues should decrease from $35,340,251 to $235,112. Furthermore, errors in reporting total revenues by quarter led to errors in the allocation among payers by quarter. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: Errors in the COVID related expenses and lost revenues presented in the Periods 4 and 5 report submissions were not detected by the Organization's internal control process. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Planned Corrective Actions and View of Responsible Officials: Management agrees with the finding and has updated its internal lost revenue calculation, with cumulative amounts through Period 6 reporting. While management did attempt to update its lost revenue amounts with filing of its Period 4 reports, additional data entry errors were made. Four out of the six entities that need to report on PRF funding have no further reporting periods; therefore, the Organization has no ability to make further corrections. As such, the internal records maintained by the Organization must serve as the final reporting of the PRF funding.