Finding Text
2022-001 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 4 TIN #411419064 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.33(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 statues, regulations, and conditions of the federal award. The Organization is required to submit an accurate report to HHS for each filing period of funds were received. Condition: The Organization claimed lost revenues attributable to coronavirus in which the final lost revenue calculation did not tie to the HHS Report. In addition, the Organization?s special report submitted to the Department of Health and Human Services (HHS) for Period 4 TIN #411419064 did not have documented review and approval by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure documentation of the review and approval of the report submitted to the Department of Health and Human Services for Period 4. The Organization had a lost revenue calculation error of $1,698,708 on the HHS special report causing a difference to the actual lost revenues (i.e. there were more lost revenues reported on the HHS special report). Effect: While the calculation error provided a difference between the lost revenues on the HHS special report and the lost revenue calculation, the Organization had excess lost revenues available to be applied. This calculation error also indicated there is a lack of policies governing the review and approval of the lost revenue calculation to the HHS special report. Questioned Costs: None reported. The Organization had excess lost revenues available to be applied. Context: Key line items were tested on the Period 4 Department of Health and Human Services special report. The HHS special reports included total lost revenue calculation errors of $1,698,708. The Organization had excess lost revenues from the period 3 and period 4 HHS reports that totaled $17,305,791. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization enhance internal control policies to ensure the HHS special report is supported by accurate lost revenue calculations. This should include implementing a secondary review and approval over the lost revenue calculation. Views of Responsible Officials: Management agrees with this finding.