Finding 375718 (2023-001)

Program: COVID-19 American Rescue Plan – Period 5 Federal Assistance Listing Number: 93.498 Type of Finding: Material Weakness in Internal Control Over Compliance Compliance Requirement: Allowable Costs Condition: Scheurer Hospital did not meet its requirements to use the funds to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Criteria: The American Rescue Plan Funds are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to coronavirus during the period of availability which are not reimbursed by other sources. Context: During the audit, it was determined that the list of expenses supporting the amounts reported in the portal included: • $76,811 of expenses which were reimbursed by other sources. • One invoice totaling $11,064 of expenses which did not have supporting documentation. • Four payroll items totaling $3,066 of expenses were duplicated in the detailed listing of allowable expenses. Cause: Management’s internal controls over allowable costs did not identify these instances of non-compliance timely. Effect: Scheurer Hospital is not in compliance with federal regulations and guidelines surrounding the use of the American Rescue Plan Funds. Expenses reported in the HHS Provider Relief Reporting were not appropriately supported. Scheurer Hospital had unused lost revenue attributable to coronavirus through the end of the reporting period of availability (Period 5) that exceeds the total of unallowable expenses listed above of $90,941. As a result, no amount is due to the program. Recommendation: We recommend management review the supporting documentation prior to reporting the information in the reporting portal and retain all supporting documentation for allowability of expenses attributable to the coronavirus which includes detailed payroll records and detailed invoices with payment support to adequately support the amount of expenses being reported during the period of availability. Furthermore, management internal control processes need to ensure expenses are only reimbursed by one source. Views of Responsible Official: Management will evaluate the above recommendations and implement recommendations where deemed appropriate.