Finding Text
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 2 TIN #860107344 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Hospital did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 2 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 2 to ensure accurate quarterly reporting of net patient revenue. Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly. Questioned Costs: None reported relating to Period 2 as eligible expenditures and lost revenues exceeded Period 2 funds received. However, future amounts eligible for lost revenues is overstated by $745,480 on the Period 2 report. Context: There are 72 key line items related to lost revenue which were tested on the Period 2 Department of Health and Human Services special report. 54 of the 72 key line items did not actually represent net patient service revenue. Repeat Finding from Prior Years: Yes, prior year finding 2021-003 Recommendation: We recommend that the Hospital modify the lost revenue reported on future reports to reflect the year-end adjustments in the appropriate quarter. Views of Responsible Officials: Management agrees with the finding.