Finding Text
2022-001 - Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: N/A Award Number: N/A Award Year: 2020 Compliance Requirement: Activities Allowed or Unallowed, Allowable Cost/Cost Principles, Reporting Questioned Costs: None Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recipients of Provider Relief Fund (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The Organization did not complete the PRF reporting for Period 2 in accordance with the U.S. Department of Health and Human Services guidance. In the Organization's Option i calculation, the Organization inadvertently excluded from their reporting certain amounts attributable to implicit price concessions when determining net patient service revenue used to calculate lost revenue. The adjustment needed within the PRF report to correct the exclusion of implicit price concessions decreased cumulative total year-over-year lost revenues from $2,727,305 to $2,471,405 on total cumulative reported distributions of PRF funding of $1,161,130. Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An ineffective review control did not identify the error in the underlying calculation. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Additionally, we recommend that management update the reported revenue information in the PRF reporting portal during the next reporting period. View of Responsible Officials: Management agrees with the above noted finding and has updated their review process to be more effective. Management will also update the amounts in the PRF reporting portal during the next available reporting period.