Finding Text
Finding No: 2022 002 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Pass Through Entity: N/A Assistance Listing Number: 93.498 Program: COVID 19 ? Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2022 to March 31, 2022 (Period 2) July 1, 2022 to September 30, 2022 (Period 3) (a) Criteria or Requirement Per 2 CFR 200.303, the 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. (b) Condition Found, Including Perspective During our test work, we performed procedures to recalculate the lost revenue reported in the portal for period 2 and found that the lost revenue calculated by the System was understated by $16,007,000. (c) Possible Cause The System controls to ensure the accuracy of the lost revenue reported for portal period ended September 30, 2022, did not operate effectively. (d) Questioned Cost None (e) Effect The System was in compliance with the program requirement that Federal funds were not expended for unallowable purposes and however, evidence of the effective operation of management review controls was not maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the System strengthen controls over the management review process to ensure the accuracy of calculations reported the HRSA portal. (i) View of Responsible Officials Management concurs with the finding. This did not result in an overstatement of qualifying expenditures and no repayment of funding was required. While appropriate controls exist, but did not always operate as designed, relative to management review and recalculation of expenditures, opportunity exists to retrain staff and further enhance controls.