Finding Text
Assistance Listing Number, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services, COVID 19 Provider Relief Fund and American Rescue Plan Rural Distribution Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria The System must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The reporting requirements for the Provider Relief Fund (PRF) requires recipients that apply PRF payments toward lost revenue to use one of the following options for calculating lost revenue: Option i: The different between actual patient care revenue Option ii: The difference between budgeted (prior to March 27, 2020) and actual patient care revenue Option iii: The amount calculated by any reasonable method of estimating revenue Condition The System does not have a formal review process to ensure the revenue reported within the PRF reporting submissions properly reconciles to the underlying financial statements. The System selected Option i for reporting lost revenues, however the actual revenue reported for each quarter of 2022 did not reconcile to the underlying accounting records. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context There was no independent review of the actual revenue for 2022 reported within the PRF reporting portal to evaluate the completeness and accuracy of the data used in the calculation of lost revenue. The quarterly totals reported for 2022 actual revenue were each misstated as the revenue accrual was not included in the figures reported in the portal. This resulted in the over reporting of lost revenues by approximately $360,000 for 2022. Cause and Effect The lack of an independent review of the reporting submission resulted in a reporting error and could also result in an increased risk of incomplete or inaccurate information reported to the granting agency. Recommendation The System should implement a process to ensure an independent review of the reporting submission is completed prior to finalization. Views of Responsible Officials and Corrective Action Plan Management will implement a process to ensure an independent review of the reporting submission is completed prior to submission. The lost revenue reported in the period four portal submission was overstated by approximately $360,000 as a result of the error identified. The System had excess lost revenue that did not have to be utilized to justify recognition of the funding received, therefore this error had no impact on meeting the conditions of the funding received.