FAC Explorer

Finding 20935 (2022-002)

Significant Deficiency Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-27
Audit: 23232
Organization: Corewell Health & Affiliates (MI)
Auditor: Ernst & Young LLP

AI Summary

  • Core Issue: Internal controls over lost revenue reporting in the HRSA PRF portal were inadequate, leading to an overstatement of lost revenues by $23,104,664.
  • Impacted Requirements: Compliance with 2 CFR Section 200.303 regarding effective internal controls and accurate reporting of federal awards.
  • Recommended Follow-Up: Strengthen internal controls for reviewing HRSA PRF portal instructions to ensure accurate input of lost revenue amounts.

Finding Text

Finding 2022-002 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) Pass-Through Grantor: Not applicable Pass-Through Award Number: Not applicable Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?The Non-Federal Entity Must: (a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? The Provider Relief Programs: Provider Relief Fund and ARP Rural Payments Frequently Asked Questions states the following: ?In order to accept a payment, must the provider have already incurred eligible expenses and losses higher than the Provider Relief Fund payment received? (Modified 6/11/2021). No. Providers do not need to be able to prove that prior and/or future lost revenues and expenses attributable to COVID-19 (excluding those covered by other sources of reimbursement) meet or exceed their Provider Relief Fund payment at the time they accept such a payment. Providers must report on the use of Provider Relief Fund payments in accordance with legal and program requirements in the relevant Reporting Time Period. Recipients may use payments for eligible expenses incurred prior to receipt of those payments (i.e., pre-award costs) so long as they are to prevent, prepare for, and respond to coronavirus. Providers must follow their basis of accounting to determine expenses. Duplication of expenses and lost revenues is not permitted. All recipients are subject to audit.? ?If a Reporting Entity has more lost revenues for a ?Payment Received Period? than it received Provider Relief Fund and/or ARP Rural payments for the same period, can those lost revenues be carried forward and applied against payments received during later ?Payment Received Periods? and included in the lost revenues reported during later reporting periods? (Modified 5/5/2023) Yes. Provider Relief Fund and/or ARP Rural payments may be applied to expenses and lost revenues according to the period of availability of funding. However, expenses and lost revenues may not be duplicated. Specifically, payments received may not be applied to the same expenses and lost revenues that Provider Relief Fund or ARP Rural payments received in prior payment periods already reimbursed. The Payment Received Periods described in the Post-Payment Notice of Reporting Requirements determine the period of availability of funding and when reports are due. The opportunity to apply Provider Relief Fund payments (excluding the Nursing Home Infection Control Distribution) and ARP Rural payments for lost revenues will be available up to June 30, 2023, the end of the quarter in which the COVID-19 Public Health Emergency ends.? Condition: Management did not have sufficiently designed internal controls over the review and interpretation of HRSA PRF portal instructions for the input of the lost revenue amounts into the HRSA PRF portal for Spectrum Health System (the Parent), TIN 383382353, General Distribution HRSA PRF report and the individual subsidiary Targeted Distribution HRSA PRF reports. Cause: Management?s internal controls over the review and interpretation of instructions related to the input of lost revenue into the HRSA PRF portal were not sufficient to ensure the lost revenue recorded in the General Distribution portal ?Total Lost Revenues for the Period of Availability (January 1, 2020 to December 31, 2022)? line did not include the lost revenues that had been transferred from the Parent to subsidiaries and recorded in the portal for the subsidiaries Targeted Distributions. Effect or Potential Effect: The lost revenues reported in the HRSA PRF portal were misstated. Questioned Costs: None Context: There were a total of eighteen HRSA PRF reports submitted for the year ended December 31, 2022. We tested a sample of five HRSA PRF reports. Per our inspection of our sample of five Corewell Health West HRSA PRF portal submissions for reporting period 4, the General Distribution and four Targeted Distributions, we identified two Targeted Distributions where the lost revenue allocated to the subsidiaries in the Targeted Distributions were also included in the Parent lost revenue portal for the ?Total Lost Revenue for the Period of Availability (January 1, 2020 to December 31, 2022)? line for the General Distribution. Per our inspection of the lost revenue calculation, we noted that five entities utilized lost revenue transferred from the Parent in reporting period 4. In aggregate, this resulted in an overstatement of lost revenues of $23,104,664 in the Parent General Distribution HRSA PRF portal. Total Lost Revenues for the Period of Availability (January 1, 2020 to December 31, 2022) reported in the Reporting Period 4 General Distribution was $228,959,327. The correct amount of lost revenue reported for Period 4 should have been $205,854,663. Total expenses reported on the Schedule for PRF for the year ended December 31, 2022 are $42,175,576. Identification as a Repeat Finding: Partial repeat of 2021-008. Recommendation: We recommend that management implement more robust internal controls for review of the instructions for the HRSA PRF Portal. Views of Responsible Officials: When populating the Period 4 HRSA PRF portal for Spectrum Health System, Corewell Health West management was aware that the inputs were not appropriately considering the System lost revenue attributed to the affiliates. In order to communicate to the users of the portal and other auditors, Management included an excel tracking worksheet which was upload on the HRSA PRF portal showing the total lost revenue used as an organization and the remaining balance left to be used. When populating the Period 5 filing, due September 30, 2023, Corewell Health West Management will correctly input the lost revenue in the Parent submission in order to reflect the lost revenue used by the individual subsidiaries.

Corrective Action Plan

Finding 2022-002 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Grantor: Not applicable Pass-Through Award Number: Not applicable Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Summary of finding: Management?s internal controls over the review and interpretation of instructions related to the input of lost revenue into the HRSA PRF portal were not sufficient to ensure the lost revenue recorded in the General Distribution portal ?Total Lost Revenues for the Period of Availability (January 1, 2020 to December 31, 2022)? line did not include the lost revenues that had been transferred from the Parent to subsidiaries and recorded in the portal for the subsidiaries Targeted Distributions. Corrective Action Plan: When populating the Period 4 HRSA PRF portal for Spectrum Health System, Corewell Health West management was aware that the inputs were not considering the System lost revenue attributed to the affiliates appropriately. In order to communicate to the users of the portal and other auditors, Management included an excel tracking worksheet which was uploaded on the HRSA PRF portal showing the total lost revenue used as an organization and the remaining balance left to be used. When populating the Period 5 filing, due September 30, 2023, Corewell Health West Management will correctly input the lost revenue in the Parent submission in order to reflect the lost revenue used by the individual subsidiaries. Individual responsible for the corrective action: Cindy Brink, Director, System Accounting & Reporting Timing of the Corrective Action Period 5 HRSA PRF portal filing, due September 30, 2023.

Categories

Matching / Level of Effort / Earmarking Cash Management Period of Performance Reporting

Other Findings in this Audit

  • 20836 2022-003
    Material Weakness
  • 20837 2022-004
    Material Weakness
  • 20838 2022-003
    Material Weakness
  • 20839 2022-003
    Material Weakness
  • 20840 2022-001
    Material Weakness Repeat
  • 20841 2022-003
    Material Weakness
  • 20842 2022-003
    Material Weakness
  • 20843 2022-006
    Significant Deficiency Repeat
  • 20844 2022-003
    Material Weakness
  • 20845 2022-004
    Material Weakness
  • 20846 2022-003
    Material Weakness
  • 20847 2022-004
    Material Weakness
  • 20848 2022-003
    Material Weakness
  • 20849 2022-005
    Significant Deficiency
  • 20850 2022-001
    Material Weakness Repeat
  • 20851 2022-003
    Material Weakness
  • 20852 2022-003
    Material Weakness
  • 20853 2022-004
    Material Weakness
  • 20854 2022-003
    Material Weakness
  • 20855 2022-004
    Material Weakness
  • 20856 2022-003
    Material Weakness
  • 20857 2022-004
    Material Weakness
  • 20858 2022-003
    Material Weakness
  • 20859 2022-004
    Material Weakness
  • 20860 2022-003
    Material Weakness
  • 20861 2022-004
    Material Weakness
  • 20862 2022-003
    Material Weakness
  • 20863 2022-005
    Significant Deficiency
  • 20864 2022-003
    Material Weakness
  • 20865 2022-004
    Material Weakness
  • 20866 2022-003
    Material Weakness
  • 20867 2022-005
    Significant Deficiency
  • 20868 2022-003
    Material Weakness
  • 20869 2022-006
    Significant Deficiency Repeat
  • 20870 2022-003
    Material Weakness
  • 20871 2022-004
    Material Weakness
  • 20872 2022-003
    Material Weakness
  • 20873 2022-004
    Material Weakness
  • 20874 2022-003
    Material Weakness
  • 20875 2022-004
    Material Weakness
  • 20876 2022-003
    Material Weakness
  • 20877 2022-004
    Material Weakness
  • 20878 2022-001
    Material Weakness Repeat
  • 20879 2022-003
    Material Weakness
  • 20880 2022-003
    Material Weakness
  • 20881 2022-004
    Material Weakness
  • 20882 2022-003
    Material Weakness
  • 20910 2022-004
    Material Weakness
  • 20911 2022-003
    Material Weakness
  • 20912 2022-004
    Material Weakness
  • 20913 2022-003
    Material Weakness
  • 20914 2022-004
    Material Weakness
  • 20915 2022-003
    Material Weakness
  • 20916 2022-004
    Material Weakness
  • 20917 2022-003
    Material Weakness
  • 20918 2022-006
    Significant Deficiency Repeat
  • 20919 2022-003
    Material Weakness
  • 20920 2022-006
    Significant Deficiency Repeat
  • 20921 2022-003
    Material Weakness
  • 20922 2022-004
    Material Weakness
  • 20923 2022-003
    Material Weakness
  • 20924 2022-006
    Significant Deficiency Repeat
  • 20925 2022-003
    Material Weakness
  • 20926 2022-003
    Material Weakness
  • 20927 2022-004
    Material Weakness
  • 20928 2022-003
    Material Weakness
  • 20929 2022-006
    Significant Deficiency Repeat
  • 20930 2022-003
    Material Weakness
  • 20931 2022-006
    Significant Deficiency Repeat
  • 20932 2022-003
    Material Weakness
  • 20933 2022-006
    Significant Deficiency Repeat
  • 20934 2022-001
    Material Weakness Repeat
  • 20936 2022-003
    Material Weakness
  • 20937 2022-004
    Material Weakness
  • 20938 2022-003
    Material Weakness
  • 20939 2022-004
    Material Weakness
  • 20940 2022-003
    Material Weakness
  • 20941 2022-006
    Significant Deficiency Repeat
  • 20942 2022-003
    Material Weakness
  • 20943 2022-006
    Significant Deficiency Repeat
  • 20944 2022-003
    Material Weakness
  • 20945 2022-004
    Material Weakness
  • 20946 2022-003
    Material Weakness
  • 20947 2022-004
    Material Weakness
  • 20948 2022-003
    Material Weakness
  • 20949 2022-004
    Material Weakness
  • 20950 2022-003
    Material Weakness
  • 20951 2022-004
    Material Weakness
  • 20952 2022-003
    Material Weakness
  • 20953 2022-003
    Material Weakness
  • 20954 2022-005
    Significant Deficiency
  • 20955 2022-003
    Material Weakness
  • 20956 2022-004
    Material Weakness
  • 20957 2022-003
    Material Weakness
  • 21170 2022-004
    Material Weakness
  • 21171 2022-003
    Material Weakness
  • 21172 2022-004
    Material Weakness
  • 21173 2022-003
    Material Weakness
  • 21174 2022-003
    Material Weakness
  • 21175 2022-005
    Significant Deficiency
  • 21176 2022-003
    Material Weakness
  • 21177 2022-006
    Significant Deficiency Repeat
  • 21178 2022-003
    Material Weakness
  • 21179 2022-005
    Significant Deficiency
  • 21180 2022-003
    Material Weakness
  • 21181 2022-004
    Material Weakness
  • 21182 2022-003
    Material Weakness
  • 21302 2022-006
    Significant Deficiency Repeat
  • 21303 2022-003
    Material Weakness
  • 21304 2022-004
    Material Weakness
  • 21305 2022-003
    Material Weakness
  • 21306 2022-004
    Material Weakness
  • 21307 2022-001
    Material Weakness Repeat
  • 21308 2022-003
    Material Weakness
  • 21309 2022-003
    Material Weakness
  • 21310 2022-003
    Material Weakness
  • 21311 2022-003
    Material Weakness
  • 21312 2022-004
    Material Weakness
  • 21313 2022-001
    Material Weakness Repeat
  • 21314 2022-005
    Significant Deficiency
  • 21315 2022-001
    Material Weakness Repeat
  • 21316 2022-003
    Material Weakness
  • 21317 2022-006
    Significant Deficiency Repeat
  • 597278 2022-003
    Material Weakness
  • 597279 2022-004
    Material Weakness
  • 597280 2022-003
    Material Weakness
  • 597281 2022-003
    Material Weakness
  • 597282 2022-001
    Material Weakness Repeat
  • 597283 2022-003
    Material Weakness
  • 597284 2022-003
    Material Weakness
  • 597285 2022-006
    Significant Deficiency Repeat
  • 597286 2022-003
    Material Weakness
  • 597287 2022-004
    Material Weakness
  • 597288 2022-003
    Material Weakness
  • 597289 2022-004
    Material Weakness
  • 597290 2022-003
    Material Weakness
  • 597291 2022-005
    Significant Deficiency
  • 597292 2022-001
    Material Weakness Repeat
  • 597293 2022-003
    Material Weakness
  • 597294 2022-003
    Material Weakness
  • 597295 2022-004
    Material Weakness
  • 597296 2022-003
    Material Weakness
  • 597297 2022-004
    Material Weakness
  • 597298 2022-003
    Material Weakness
  • 597299 2022-004
    Material Weakness
  • 597300 2022-003
    Material Weakness
  • 597301 2022-004
    Material Weakness
  • 597302 2022-003
    Material Weakness
  • 597303 2022-004
    Material Weakness
  • 597304 2022-003
    Material Weakness
  • 597305 2022-005
    Significant Deficiency
  • 597306 2022-003
    Material Weakness
  • 597307 2022-004
    Material Weakness
  • 597308 2022-003
    Material Weakness
  • 597309 2022-005
    Significant Deficiency
  • 597310 2022-003
    Material Weakness
  • 597311 2022-006
    Significant Deficiency Repeat
  • 597312 2022-003
    Material Weakness
  • 597313 2022-004
    Material Weakness
  • 597314 2022-003
    Material Weakness
  • 597315 2022-004
    Material Weakness
  • 597316 2022-003
    Material Weakness
  • 597317 2022-004
    Material Weakness
  • 597318 2022-003
    Material Weakness
  • 597319 2022-004
    Material Weakness
  • 597320 2022-001
    Material Weakness Repeat
  • 597321 2022-003
    Material Weakness
  • 597322 2022-003
    Material Weakness
  • 597323 2022-004
    Material Weakness
  • 597324 2022-003
    Material Weakness
  • 597352 2022-004
    Material Weakness
  • 597353 2022-003
    Material Weakness
  • 597354 2022-004
    Material Weakness
  • 597355 2022-003
    Material Weakness
  • 597356 2022-004
    Material Weakness
  • 597357 2022-003
    Material Weakness
  • 597358 2022-004
    Material Weakness
  • 597359 2022-003
    Material Weakness
  • 597360 2022-006
    Significant Deficiency Repeat
  • 597361 2022-003
    Material Weakness
  • 597362 2022-006
    Significant Deficiency Repeat
  • 597363 2022-003
    Material Weakness
  • 597364 2022-004
    Material Weakness
  • 597365 2022-003
    Material Weakness
  • 597366 2022-006
    Significant Deficiency Repeat
  • 597367 2022-003
    Material Weakness
  • 597368 2022-003
    Material Weakness
  • 597369 2022-004
    Material Weakness
  • 597370 2022-003
    Material Weakness
  • 597371 2022-006
    Significant Deficiency Repeat
  • 597372 2022-003
    Material Weakness
  • 597373 2022-006
    Significant Deficiency Repeat
  • 597374 2022-003
    Material Weakness
  • 597375 2022-006
    Significant Deficiency Repeat
  • 597376 2022-001
    Material Weakness Repeat
  • 597377 2022-002
    Significant Deficiency Repeat
  • 597378 2022-003
    Material Weakness
  • 597379 2022-004
    Material Weakness
  • 597380 2022-003
    Material Weakness
  • 597381 2022-004
    Material Weakness
  • 597382 2022-003
    Material Weakness
  • 597383 2022-006
    Significant Deficiency Repeat
  • 597384 2022-003
    Material Weakness
  • 597385 2022-006
    Significant Deficiency Repeat
  • 597386 2022-003
    Material Weakness
  • 597387 2022-004
    Material Weakness
  • 597388 2022-003
    Material Weakness
  • 597389 2022-004
    Material Weakness
  • 597390 2022-003
    Material Weakness
  • 597391 2022-004
    Material Weakness
  • 597392 2022-003
    Material Weakness
  • 597393 2022-004
    Material Weakness
  • 597394 2022-003
    Material Weakness
  • 597395 2022-003
    Material Weakness
  • 597396 2022-005
    Significant Deficiency
  • 597397 2022-003
    Material Weakness
  • 597398 2022-004
    Material Weakness
  • 597399 2022-003
    Material Weakness
  • 597612 2022-004
    Material Weakness
  • 597613 2022-003
    Material Weakness
  • 597614 2022-004
    Material Weakness
  • 597615 2022-003
    Material Weakness
  • 597616 2022-003
    Material Weakness
  • 597617 2022-005
    Significant Deficiency
  • 597618 2022-003
    Material Weakness
  • 597619 2022-006
    Significant Deficiency Repeat
  • 597620 2022-003
    Material Weakness
  • 597621 2022-005
    Significant Deficiency
  • 597622 2022-003
    Material Weakness
  • 597623 2022-004
    Material Weakness
  • 597624 2022-003
    Material Weakness
  • 597744 2022-006
    Significant Deficiency Repeat
  • 597745 2022-003
    Material Weakness
  • 597746 2022-004
    Material Weakness
  • 597747 2022-003
    Material Weakness
  • 597748 2022-004
    Material Weakness
  • 597749 2022-001
    Material Weakness Repeat
  • 597750 2022-003
    Material Weakness
  • 597751 2022-003
    Material Weakness
  • 597752 2022-003
    Material Weakness
  • 597753 2022-003
    Material Weakness
  • 597754 2022-004
    Material Weakness
  • 597755 2022-001
    Material Weakness Repeat
  • 597756 2022-005
    Significant Deficiency
  • 597757 2022-001
    Material Weakness Repeat
  • 597758 2022-003
    Material Weakness
  • 597759 2022-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $42.18M
97.036 Covid-19 Disaster Grants - Public Assistance (presidentially Declared Disasters) $37.66M
93.697 Covid-19 Testing for Rural Health Clinics $2.86M
93.461 Covid-19 Testing for the Uninsured $2.52M
93.926 Healthy Start Initiative $1.15M
93.185 Immunization Research, Demonstration, Public Information and Education_training and Clinical Skills Improvement Projects $619,279
93.226 Research on Healthcare Costs, Quality and Outcomes $531,913
93.310 Trans-Nih Research Support $371,812
93.889 National Bioterrorism Hospital Preparedness Program $260,332
93.914 Hiv Emergency Relief Project Grants $235,882
93.778 Medical Assistance Program $136,376
93.153 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $132,730
93.276 Drug-Free Communities Support Program Grants $125,000
93.307 Minority Health and Health Disparities Research $103,701
93.817 Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities $89,375
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $77,452
93.866 Aging Research $71,524
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $64,319
93.361 Nursing Research $57,417
93.846 Arthritis, Musculoskeletal and Skin Diseases Research $55,102
93.867 Vision Research $52,369
93.110 Maternal and Child Health Federal Consolidated Programs $50,836
93.136 Injury Prevention and Control Research and State and Community Based Programs $49,600
93.178 Nursing Workforce Diversity $48,380
93.395 Cancer Treatment Research $44,000
93.994 Maternal and Child Health Services Block Grant to the States $34,588
93.837 Cardiovascular Diseases Research $33,000
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $31,525
93.855 Allergy, Immunology and Transplantation Research $29,353
93.217 Family Planning_services $29,288
99.RD Nhlbi Mds Trial $27,500
93.080 Blood Disorder Program: Prevention, Surveillance, and Research $22,447
93.301 Small Rural Hospital Improvement Grant Program $20,511
93.397 Cancer Centers Support Grants $17,628
93.859 Biomedical Research and Research Training $17,150
93.838 Lung Diseases Research $15,863
93.268 Immunization Cooperative Agreements $12,800
93.350 National Center for Advancing Translational Sciences $10,487
93.959 Block Grants for Prevention and Treatment of Substance Abuse $10,237
93.213 Research and Training in Complementary and Integrative Health $10,118
12.300 Basic and Applied Scientific Research $7,079
93.940 Hiv Prevention Activities_health Department Based $5,804
12.420 Military Medical Research and Development $5,100
93.426 Improving the Health of Americans Through Prevention and Management of Diabetes and Heart Disease and Stroke $4,575
93.788 Opioid Str $3,564
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $2,425
93.279 Drug Abuse and Addiction Research Programs $1,910
93.393 Cancer Cause and Prevention Research $1,796
93.839 Blood Diseases and Resources Research $1,750
93.399 Cancer Control $1,000
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $892
93.977 Preventive Health Services_sexually Transmitted Diseases Control Grants $316
93.103 Food and Drug Administration_research $201