Finding Text
Criteria: Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act and are to be used to prevent, prepare for, and respond to coronavirus. Recipients are required to establish and maintain effective internal control over the federal award and to report use of funds to HHS through the Health Resources and Services Administration (HRSA) Reporting Portal. The reporting is to be prepared using accurate financial information and be in accordance with reporting requirements.
Condition: The Hospital elected to report Period 4 lost revenues utilizing Option 3, the alternative method of calculating lost revenues attributable to coronavirus. The Hospital’s alternative method did not consider the impact of Medicaid supplemental payments recognized to revenue for 2022 Quarter 1.
Cause: The established internal controls did not consider the appropriate grouping of Medicaid supplemental payments when calculating Total Revenue/Net Charges from Patient Care.
Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly.
Questioned Costs: 2022 Quarter 1 Lost Revenue was overstated by $425,207. However, the Hospital’s Period 4 portal submission reflects $1,988,424 of remaining unused lost revenues that management believes could offset the identified questioned costs.
Recommendation: We recommend the Hospital continue to design and implement controls, including levels of review, to ensure reporting is prepared using accurate financial information and in accordance with reporting
requirements.
Views of Responsible
Officials of the Auditee:
The Hospital agrees with this finding. See management’s corrective
action plan.