Finding Text
Finding 2022-001 – Internal Control Deficiency Over Activities Allowed or Unallowed
Identification of the Federal Program:
Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA)
Assistance Listing No.: 93.498 COVID-19 Provider Relief Funds and American Rescue Plan (ARP) Rural Distribution
Award Period of Performance: January 01, 2020 – December 31, 2021
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
CHRISTUS Health (CHRISTUS) did not consistently retain documentation to evidence approval of certain expenses incurred related to COVID-19.
Cause:
CHRISTUS did not have controls in place to ensure amounts recorded as COVID-19 related expenses were reviewed and approved.
Effect or Potential Effect:
Lack of documentation of controls, including review and approval of expenses, may lead to ineligible expenses charged to the program.
Questioned Costs:
None.
Context:
We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.
CHRISTUS reported $12,991,294 of total expenses for the Period 2 HRSA Portal Submission.
Identification as a Repeat Finding, if Applicable:
The finding is a repeat finding – Finding 2021-001.
Recommendation:
CHRISTUS should refine its process to retain documentation evidencing that each expense recorded to the COVID accounts is reviewed and approved.
View of Responsible Officials:
Management agrees that certain expenses to the COVID department were not reviewed and approved at the order entry level in specific cases. Although evidence of review was not retained for every charge to the COVID department, we believe the appropriateness of the charge was reasonable. Additionally, based on monthly review of departmental expenses and full-time equivalent (FTE) analysis at the facility level, we believe that these expenditures are subject to the appropriate level of review to identify unexpected variances. We plan to review our processes related to the retention of expense documentation to improve audit evidence.