Finding 20565 (2022-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
$1
Year
2022
Accepted
2023-09-28

AI Summary

  • Core Issue: The Authority failed to provide adequate documentation for $358,571 in expenses related to the COVID-19 Provider Relief Fund, raising concerns about compliance with federal guidelines.
  • Impacted Requirements: The Authority did not meet the requirement to submit accurate financial reports for periods three and four, as mandated by federal assistance regulations.
  • Recommended Follow-Up: Revise policies and procedures to ensure proper documentation of all expenditures charged to federal grants, with oversight from the CFO.

Finding Text

2022-001 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing No. 93.498 U.S. Department of Health and Human Services Period 3 and Period 4 Expenditures Criteria or Specific Requirement: Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) Condition: The Authority is required to prepare and submit period three and period four Provider Relief Fund (PRF) reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned Costs: $358,571; the amount of expenses reported that did not have support. Context: The Authority?s submitted reports included the activity of the Authority and their Nursing Home Facilities (Nursing Homes). There are four separate nursing home management companies that provide services to the Authority?s seven Nursing Homes. One nursing home management company was unable to justify that the expenditures charged to the grant were related to specific uses allowed for the nursing home infection control payments received. Effect: The Authority does not have documentation to support certain expenditures related to nursing home infection control payments that were charged to the PRF grant in period three. These expenses may not be allowable. Cause: The Authority?s internal controls did not ensure detailed listings of expenses charged to PRF were maintained for all Nursing Homes. Identification as a Repeat Finding: Repeat finding 2021-001 Recommendation: Policies and procedures over expenditures charged to federal grants should be modified to ensure documentation is maintained. Responsible Official: Todd Scroggins, Chief Financial Officer (CFO) at the Authority. Planned Corrective Actions: See separate auditee document for detail of corrective action plan.

Corrective Action Plan

Corrective Action Plan for Finding 2022-001 We are in receipt of the Findings Required to be Reported by Uniform Guidance, regarding questioned costs and material instance of noncompliance with respect to Activities Allowed/Unallowed and Allowable Costs/Cost Principles. Decatur Hospital Authority?s Chief Financial Officer, Todd Scroggins, is responsible to oversee and implement the corrective action plan. In its Provider Relief period three and period four reporting submissions for the year ended December 31, 2022, the Authority?s reports included the activity of the Authority and their Nursing Home Facilities (Nursing Homes). The reported activity included other PRF expenses, nursing home infection control expenses and lost revenues. There are four separate nursing home management companies that provide services to the Authority?s seven Nursing Homes. There were approximately $358,571 in nursing home infection control expenses that were unable to be reconciled to eligible expenses for one of the Nursing Homes. The Authority provided the Nursing Homes with templates to use to provide the Authority with the necessary information for the reporting as the reporting was complete on the TIN of the Authority. The Authority relied on the accuracy of the information provided by the Nursing Homes. The Authority was not aware of the findings in the audit of period 1 and period 2 at the time the Authority submitted period 3 reporting. Therefore, the inaccurate reconciliation of eligible infection control expenses from period 2 was also used for reporting in period 3, which caused a recurrence in audit findings due to timing of audits and findings reported to the Authority. The Authority?s CFO will judgmentally perform detailed testing of reported costs and lost revenue from the Nursing homes in future reporting periods. In addition, the Authority?s CFO and management team will perform a detailed analysis of the reporting requirements in accordance with the final guidelines set by HRSA for future reporting periods. As deemed necessary, the Authority will modify the policies and procedures over federal grant reporting. The Authority?s CFO will oversee this to ensure that it is accomplished for future unreported periods as of this date. The corrective action plan will be implemented by December 31, 2023.

Categories

Questioned Costs Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 597007 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $4.64M
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $549,778