Finding 20658 (2022-002)

2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN #953154530 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance 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: The District?s lost revenue calculation claimed under the Provider Relief Fund program and the HHS reported submitted to the Department of Health and Human Services were not reviewed and approved by a separate individual outside of the preparer. Cause: The District did not have an internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 2 was documented. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: All key line items related to lost revenue were tested on the Period 2 Department of Health and Human Services special report. Repeat Finding from Prior Year: Yes, finding 2021-002 Recommendation: We recommend the District implement a control process which includes a secondary review and documented approval of the lost revenue calculation under the federal program. Views of Responsible Officials: Management agrees with the finding.