Finding Text
2022-003 - Material Weakness in Internal Control over Compliance Finding
Federal agency: U.S. Department of Health and Human Services (HHS)
Federal program title: COVID-19 Provider Relief Fund (PRF) - Period 4
Assistance Listing No.: 93.498
Criteria: Provider Relief Funds were provided under the Coronavirus Aid,
Relief, and Economic Security Act and are to be used to prevent,
prepare for, and respond to coronavirus. Recipients are required to
establish and maintain effective internal control over the federal award
and to report use of funds to HHS through the Health Resources and
Services Administration (HRSA) Reporting Portal. The reporting is to
be prepared using accurate financial information and be in accordance
with reporting requirements.
Condition: The Hospital elected to report Period 4 lost revenues utilizing
Option 3, the alternative method of calculating lost revenues
attributable to coronavirus. The Hospital’s alternative method did not
consider the impact of Medicaid supplemental payments recognized to
revenue for 2022 Quarter 1.
Cause: The established internal controls did not consider the appropriate
grouping of Medicaid supplemental payments when calculating Total
Revenue/Net Charges from Patient Care.
Effect: The lack of adequate policies governing report preparation and
submission increases the risk that the report could be filed incorrectly.
Questioned Costs: 2022 Quarter 1 Lost Revenue was overstated by $425,207. However,
the Hospital’s Period 4 portal submission reflects $1,988,424 of
remaining unused lost revenues that management believes could
offset the identified questioned costs.
Recommendation: We recommend the Hospital continue to design and implement
controls, including levels of review, to ensure reporting is prepared
using accurate financial information and in accordance with reporting
requirements.
Views of Responsible
Officials of the Auditee: The Hospital agrees with this finding. See management’s corrective
action plan.