Finding Text
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.