Finding Text
Program Information Federal Program: Provider Relief Fund (PRF) Assistance Listing Number: 93.498 Federal Agency: Department of Health & Human Services Award Year: PRF Periods 2 and 3: Funds received July 1, 2020 through June 30, 2021 Criteria or requirement Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Reporting (L) ? Special Reporting Under the terms and conditions of the award, Provider Relief Funds (PRF) is subject to 45 CFR section 75.302 (Financial management and standards for financial management systems). The PRF program requires special reporting through the Provider Relief Fund Reporting Portal that contains key line items containing critical information based on the period reported on, which includes the Calculation of Lost Revenues Attributable to Coronavirus. The Provider Relief Programs: Provider Relief Fund and ARP Rural Payments Frequently Asked Questions states that PRF payments may not be applied to the same expenses and lost revenues that were reported on in prior reporting periods. Finding Criteria Discussion Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding: During our testing over reporting, we observed management did not have effective internal controls in place to ensure lost revenues reported in the Portal were not duplicated between a subsidiary entity and the parent entity, resulting in an overstatement of lost revenues reported in the Portal. Lost revenues attributable to Coronavirus in the amount of $11,318,467 were reported in both the parent entity?s PRF reports for the general distribution report for Period 1 and for PeaceHealth St. John Medical Center?s, a subsidiary, targeted distribution report for Period 2 (i.e., lost revenues were duplicated). Cause and possible asserted effect: Controls were not operating effectively to detect and correct duplicate lost revenues shown on the portal reporting between the parent entity and the stand-alone subsidiary reports for targeted funds. Identification of questioned costs and how they were computed: None. Despite the duplicated lost revenues, there was still sufficient lost revenues in excess of PRF payments received for Period 1, 2, and 3 and therefore the Corporation has demonstrated it did earn all of the PRF payments received. This matter was isolated to the error in reporting requirements under the Federal grant program. Sample Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Repeat finding from prior year This matter is not a repeat of a finding in the immediately prior audit. Recommendation We recommend PeaceHealth management enhance their internal control process to ensure the data underlying the portal reporting is appropriately reviewed by an individual other than the preparer to ensure that duplicate lost revenue information is not reported. Views of Responsible Officials: As noted within the portal filing summary for the general reporting Period 1, the Corporation?s consolidated lost revenue totaled $141,363,926. Payments from the PRF for Period 1 totaled $53,982,121 for the consolidated parent and $14,810,675 for St. John?s Medical Center Period 2 targeted report. As a result, there were sufficient qualifying lost revenues to receive and earn all PRF funds received, regardless of the reporting error identified and described in the ?condition found? section above. Therefore, management believes no repayment of PRF funds received would be required. Management is implementing a process to add additional review steps prior to finalizing future reporting submissions.