Finding Text
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan
Applicable Federal Award Number and Year – Period 4 TIN #860107344
Reporting
Material Weakness in Internal Control Over Compliance and Material Noncompliance
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 Hospital did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue.
Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 4 to ensure accurate quarterly reporting of net patient revenue.
Effect: The lack of adequate policies governing report preparation and submission increases the risk that the report could be filed incorrectly.
Questioned Costs: None reported relating to Period 4 as eligible expenditures and lost revenues exceeded Period 4 funds received. However, future amounts eligible for lost revenues is overstated by $63,347 on the Period 4 report.
Context: There are 16 key line items related to lost revenue which were tested on the Period 4 Department of Health and Human Services special report. 4 of the 16 key line items did not actually represent net patient service revenue.
Repeat Finding from Prior Years: Yes, prior year finding 2022-003
Recommendation: We recommend that the Hospital strengthen the control process relating to calculating quarterly lost revenue under the federal program.
Views of Responsible Officials: Management agrees with the finding.