Finding Text
FINDING 2022-002 Reporting ? Significant Deficiency in Internal Controls Over Compliance. See Schedule of Findings and Questioned Costs for table. Criteria: LAJH should have appropriate internal controls in place to ensure that reporting requirements are met and amounts utilized in reports are calculated accurately and in accordance with 45 CFR 75.342. Condition/Context: The Period 2 and Period 3 Provider Relief Fund (PRF) reports submitted during the year ended August 31, 2022, were tested. LAJH elected Lost Revenues Option 1 to report lost revenue based on quarterly actuals. Amounts reported for each quarter were not calculated accurately. For each quarter reported, LAJH omitted a portion of the revenue which resulted in the revenue reported to be inaccurate and understated. Cause: Revenue amounts reported were not accurately reconciled to actual revenues as LAJH did not have a process in place to reconcile actual revenues reported on the PRF reports to LAJH?s consolidated financial statements. Effect: Errors were made in reporting quarterly Total Revenue/Net Charges on the Period 2 and Period 3 PRF reports. However, we note there was no impact to total funding received or retained by LAJH due to the error. Independent calculations of the lost revenue utilizing the amounts that should have been reported were performed. Based on calculations, lost revenue exceeded total PRF amounts received in Period 1, Period 2, and Period 3. The total amount of funding recognized on the basis of lost revenue for Period 2 and Period 3 was accurate and the amount reported per the Schedule of Expenditures of Federal Awards was also accurate. Questioned Costs: None. Repeat finding: This is a repeat of finding 2021-006. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Review controls should be in place by someone other than the preparer of the report to ensure information is accurate prior to submission of the report. Views of responsible officials: We agree with the finding but want to emphasize that the filing of Period 2 and Period 3 PRF reports had already been completed before the issuance of finding 2021-006. Since that time, we have strengthened our review procedures over grant reporting by having the corporate controller review all PRF reports for accuracy and agree amounts to LAJH?s financial statements prior to filing. We have also improved our financial reports to assist with the verification of the report preparer?s work.