Finding Text
Section III ? Federal Award Findings and Questioned Costs 2022-001 Unapproved Budgeted Revenues Included in Lost Revenue Calculation Federal Agency Department of Health and Human Services Assistance Listing Number 93.498 ? Provider Relief Fund and American Rescue Plan Rural Distribution Criteria [X] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Under the terms and conditions of the award, the recipient certifies it will include only budgeted revenues approved prior to March 27, 2020, for the entire period of availability, in its calculation of lost revenues. Condition The Hospital used its 2021 budget, which was not approved prior to March 27, 2020, in its calculation of lost revenues for calendar year 2021 for its reporting of Provider Relief Fund to the Health Resource and Services Administration. The Hospital used its 2020 budget, which was approved prior to March 27, 2020, for its calendar year 2020 lost revenues calculation; however, the 2020 budget did not cover the entire period of availability. Context This finding appears to be a systemic problem. Cause The Hospital did not have proper review of internal documentation used to report on federal awards. Effect The use of the 2021 budget did not have an effect on the Provider Relief Funds the Hospital retained based on the Period 1 reporting and will have no effect on the retention of Provider Relief Funds in future reporting periods. Lost revenue was calculated for 2021 quarters 1 and 2 but will never factor into the retention of Provider Relief Funds. The lost revenue calculated for 2020 will be sufficient for retention of all Provider Relief Funds in the current and future reporting periods. Recommendation We recommend the Hospital change its lost revenue reporting method to Option 3 in the next reporting period, which allows for any reasonable method. This could include budgeted revenues approved after March 27, 2020, to be used in the lost revenue calculation for calendar year 2021 and 2022, or to only provide lost revenue data for calendar year 2020. Views of responsible officials and planned corrective actions Going forward, the Hospital will follow the written policy established in 2022 to eliminate miscalculations.