Finding 36030 (2022-001)

Finding Reference Number 2022-001 Federal Award Name: ALN 93.498 - COVID-19 Provider Relief Fund and ARP Rural Distribution Federal Award Agency: Department of Health and Human Services Criteria - Upon receiving direct PRF and ARP Rural Funding distributed by Health Resources and Services Administration (HRSA), recipients of these funds agreed to terms and conditions which require compliance with reporting requirements, which includes the accurate reporting of lost revenue, if applicable. Condition ? Recent agency oversight directed by HRSA revealed a finding related to the method used to calculate lost revenues. The report indicated that the relevant reporting entities receiving these funds need to recalculate their lost revenues on a quarterly basis, ensuring they net all months in the quarter, including those months that did not have lost revenue. Cause ? For PRF Periods 1 through 4, Henry Ford Health calculated lost revenue available for reimbursement on a monthly basis while excluding months that did not have any lost revenue when reporting through the HRSA portal on a quarterly basis, resulting in an overstatement of lost revenue available for reimbursement. Effect ? The initial method used to calculate lost revenue available for reimbursement resulted in a $39,458,554 overstatement of Henry Ford Health?s lost revenue available for reimbursement across all associated entities that received PRF awards. HRSA directed Henry Ford Health to restate the historically reported lost revenue amounts available for reimbursement when submitting for PRF Period 5. This did not result in any questioned costs, as Henry Ford Health had sufficient lost revenue to cover the PRF payments received for Period 1 through Period 4. Questioned Costs ? None Repeat Finding from Prior Year ? No Recommendation ? Management should develop corrective action to ensure that future PRF lost revenue reported is accurately calculated and reported in accordance with PRF terms and conditions and reporting requirements. View of Responsible Officials ? See attached corrective action plan Contact Person ? Paul Kolpasky, VP and Corporate Controller Summary Schedule of Prior-Year Audit Findings for the Year Ended December 31, 2021 No matters are reportable.