Finding Text
2022-002 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) Condition: The District is required to prepare and submit period two and three provider relief fund reporting. These reports are to be prepared using accurate financial information and submitted by the deadline established. Revenues were reported on a cash basis, which materially impacted the quarterly lost revenues reported. Questioned costs: None. Context: The period two and period three provider relief fund reports were tested. The District selected option 1 to report lost revenues based on quarterly actuals. A material error in the calculation of the patient service revenue for the quarters reported was identified. This included the use of cash collections rather than the District?s normal method of accounting, accrual basis, materially impacting the quarterly lost revenues reported. Effect: Errors were made in reporting quarterly Total revenue/Net Charges from Patient Care for each year, 2019, 2020, and 2021. Lost revenue was not accurately reported. However, the District utilized allowable costs for Period 2 and 3 funding received, so that no lost revenues were utilized as a basis for the funds received, and as such, there were no questioned costs. Cause: Internal controls of compliance were not in place to ensure the District properly reported revenue. The District selected option one and did not accurately report revenue on the accrual basis. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Identification as a repeat finding: This is a repeat finding. See 2021-002. Views of responsible officials and planned corrective actions: Management agrees with this finding and will review procedures regarding lost revenue calculations to ensure amounts reported are accurate for future reporting periods. See attached corrective action plan for the District?s response to finding.