Finding 21785 (2022-001)

Significant Deficiency
Requirement
ABL
Questioned Costs
-
Year
2022
Accepted
2023-02-28

AI Summary

  • Core Issue: The Organization inaccurately reported lost revenues by misclassifying Medicaid adjustments, leading to overstated figures.
  • Impacted Requirements: Compliance with reporting standards (45 CFR 75.342) and accurate financial reporting for Provider Relief Fund submissions.
  • Recommended Follow-Up: Revise policies and procedures for federal grant reporting to ensure accuracy and alignment with final financial statements.

Finding Text

Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing No. 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement ? Reporting (45 CFR 75.342) and Activities Allowed or 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 Organization is required to prepare and submit period one provider relief fund reporting. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned costs ? Unknown Context ? The period one provider relief fund report was tested. The Organization selected option three to report lost revenues based on quarterly actual amounts. The Organization incorrectly included the Medicaid adjustments in the wrong direction in order to tie out total patient revenue and certain other Medicaid adjustments were not allocated throughout the fiscal year. Error resulted in overstated lost revenues. However, once the lost revenue calculation was corrected, the Organization was able to show they had sufficient lost revenues and did not impact the recognition of Provider Relief Funds. Effect ? Errors were made in reporting quarterly Total Revenue/Net Charges from Patient Care. Lost revenues were not accurately reported. Cause ? The Organization did not correctly enter the Medicaid adjustments to their lost revenue calculation which resulted in overstated lost revenue. Identification as a repeat finding ? Not a repeat finding Recommendation ? Policies and procedures over federal grant reporting should be modified to ensure reports are accurate and agree to the final adjusted financial statements.

Corrective Action Plan

During our fiscal year 2022 audit, the period one provider relief fund (PRF) report was tested. An error was discovered in the report involving the final Medicaid cost report adjustment. While this adjustment was included in the PRF report, the entry made to include it was made in the exact opposite direction from how it should have been recorded. This resulted in overstated lost revenue. Upon correcting the entry and balancing it against the applicable fiscal year, the clinic was still able to fully allocate the lost revenue against the PRF funds. After the corrections were made, there was still $30,128 in lost revenue that was not covered by the funds. In an effort to correct this error with HHS, Angela Gargus, CFO, called the PRF provider support line. She explained the situation and asked for the portal to be opened so she could update her report. She talked with at least three different levels of support. While all understood her desire to update the information, she was told since HHS was already up to period 4 and 5 that the likelihood of being able to submit a correction was slim. The support line did take her official request with the details of the correction so a formal response could be obtained for the clinic?s files. Her official request was denied by HRSA PRB Inquiries on January 4, 2023. The denial stated the report was closed and changes could no longer be made. She was instructed to maintain all records related to the organization?s PRF payment for three years. At this time, all actions that can be taken to correct this error have been tried. Ms. Gargus has stored the corrected report as well as the documented attempt to submit the corrected file to HHS in the file with the original PRF submission. The clinic?s CEO and Board of Directors are aware of the error and the actions taken to attempt to fix it.

Categories

Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 598227 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $958,115
93.498 Covid-19 - Provider Relief Fund $404,061
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $350,304
93.224 Covid-19 - Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $317,965
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $3,816