FAC Explorer

Finding 30244 (2022-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-02-05
Audit: 37711
Organization: Eisenhower Medical Center (CA)
Auditor: Ernst & Young LLP

AI Summary

  • Core Issue: The Company lacks consistent documentation to prove that expenses for Provider Relief Funds (PRF) were allowable COVID-19 related costs.
  • Impacted Requirements: This deficiency violates Section 200.303 of the Uniform Guidance, which mandates effective internal controls over federal awards.
  • Recommended Follow-up: The Company should improve its documentation process to ensure all expenses are reviewed and approved in line with PRF program requirements.

Finding Text

Finding 2022-001 ? Internal Control Deficiency and Noncompliance over Activities Allowed or Unallowed and Allowable Costs Identification of the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498 Provider Relief Funds, COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Period of Performance: January 1, 2020 ? December 31, 2021 Criteria or Specific Requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Company did not consistently retain documentation to evidence approval of expenses for certain disbursements to ensure expenses submitted for PRF were allowable COVID-19 related. Cause: The Company has a policy for paper requisitions to be moved off-site after two years. The Company was not able to locate the appropriate approval indicating the expenses are allowable COVID-19 related for such paper requisitions. Therefore, evidence of approval was not always retained. Effect or potential effect: A material weakness in internal controls over the activities allowed or unallowed, compliance requirements exist. There is no consistent documentation to support the performance of internal controls for accounts payable disbursements to ensure expenses submitted for PRF were allowable COVID-19 related. Questioned Costs: None Context: The Company had a pool of PRF related expenses that were eligible expenses that exceeded the total amount of PRF received. Total pool of PRF related expenditures was $17,237,519 for Assistance Listing 93.498, of which $7,597,704 were accounts payable disbursements. We selected 25 disbursements totaling $19,845 noting that 23 disbursements totaling $18,183 did not have evidence of proper approval. Identification as a repeat finding, if applicable: The finding is a repeat finding (2021-001). Recommendation: The Company should refine its process and retain documentation evidencing that management reviewed each expense submitted to HRSA and it qualified under the terms and conditions of the PRF program. View of Responsible Officials: The Company agrees with the finding.

Corrective Action Plan

Corrective Action Plan Finding 2022-001 Provider Relief Fund (Assistance Listing #93.498) Activities Allowed or Unallowed and Allowable Costs At the beginning of the pandemic, Eisenhower Medical Center created a COVID-19 response team to evaluate the requirements for the COVID-19 funding received and ensure the funds were only used for allowable purposes. The response team continuously monitored the FAQs and other guidance on the reporting requirements as they continued to evolve as additional funds were received. As part of the Uniform Guidance audit, Eisenhower Medical Center provided documentation of the Provider Relief Fund review process, including response team meeting agendas, email correspondence, as well as management sign-off on the lost revenue calculations and expenses submitted as part of the Provider Relief Fund Period 2 report. Through the audit testing, we were asked to provide copies of approval documents for some of the supply requisitions for expenses reported as part of the Provider Relief Fund period 2 report. The documents in question were paper approval forms for some of the supplies purchased in July through December of 2020. Historically these documents were only retained for two years and thus they were not available for the audit procedures. In November 2021, we implemented a new automated supply requisition process that is integrated with our financial software (Workday). This new implementation will help to correct this issue in the future with the ability to provide electronic documentation of date/time stamped approvals. In addition to the new requisition process we wanted to improve the process for documenting the review of the expenses and lost revenue to be reported in the Provider Relief Fund reports. To ensure our internal controls are documented to level necessary under current audit standards, Eisenhower has developed a review checklist to document the review and approval of supporting documentation of the revenue and expense information to be reported in the Provider Relief Fund reports. The checklist will be retained with our existing support of Provider Relief Fund federal expenditures. The new checklist had not been developed when the Provider Relief Fund Period 2 Report was submitted, and thus not used. The new checklist however, will be used for any future Provider Relief Fund Report submissions. Responsible Official: Melanie Long, VP Finance Anticipated Completion Date: March 31, 2023

Categories

Internal Control / Segregation of Duties Allowable Costs / Cost Principles Material Weakness Period of Performance Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 606686 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $11.15M
93.732 Mental and Behavioral Health Education and Training Grants $293,608
93.461 Covid-19 Testing for the Uninsured $114,659