Finding 372098 (2023-001)

2023-001: United States Department of Health and Human Services Federal Assistance Listing Number 93.498; Reporting Period 4 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distributions (PRF) Reporting - Material Weakness in Internal Control over Compliance and Material Noncompliance Reporting Period 4 Criteria: 2 CFR 200.303(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 statutes, regulations, and conditions of the federal award. Condition: The Center was not able to provide records to support amounts reported for 2021 Total Revenue / Net Patient Charges, a part of the Lost Revenue Calculation on the PRF required reporting. Additionally, the Reporting Period 4 PRF Report did not contain evidence of proper review and approval prior to submission. Cause: The Center had a change in CFO in March 2022. The incoming CFO was unable to locate records used by the prior CFO to support the full lost revenue calculation. Further, Center policy did not require evidence of review to be included on PRF reports prior to submission. Effect: Lost revenue calculation amounts are partially unsupported, and may be materially misstated. Additionally, the Center is unable to demonstrate that the PRF reports were properly reviewed and free of other errors. However, the risk is mitigated as the Center claimed no lost revenue in Period 4. Questioned Costs: None Context/Sampling: Key line items related to the reporting were tested for the Period 4 report. Errors (unsupported amounts) were only noted in the Lost Revenue calculation (amounts reported for 2021 Total revenue). Lost Revenue calculation amounts for 2019, 2020, and 2022 were properly supported. Repeat Finding from Prior Year(s) No Recommendation: Because the PRF program is winding down, no future PRF reports are required to be filed. Accordingly, we recommend that management require the following be maintained for all federal and state program required reports: evidence to support all reported amounts, and evidence that report review occurred prior to submission. Views of Responsible Officials: Management agrees with the finding. Refer to Corrective Action Plan.