Finding Text
Assistance Listing, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services (HHS), Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF)
Federal Award Identification Number and Year - N/A 2022
Pass through Entity - N/A
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Per the Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements dated October 27, 2022, recipients may choose to apply PRF payments toward lost revenue using one of three options up to the amount:
Option i: of the difference between actual patient care revenues;
Option ii: of the difference between budgeted (prior to March 27, 2020) and actual patient care revenues; or
Option iii: calculated by any reasonable methodology of estimating revenues
Condition - The Agency's controls in place for reporting submissions did not identify Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements guidelines were not followed related to the lost revenue calculations. The Period 4 reporting submission for lost revenue did not follow the acceptable options outlined by HHS. Additionally, the Period 2 reporting submission, completed in the previous year, did not follow the acceptable options.
Questioned Costs - None
Identification of How Questioned Costs Were Computed N/A, refer to context below for additional information.
Context - The Agency was required to submit one portal submission (Period 4), which contained lost revenue amounts during 2023. The Period 4 portal submission for lost revenue did not follow the acceptable options provided by HHS, as noted in the criteria above. The Agency reported to HHS it used option ii (2020 Budgeted Revenue) to calculate its lost revenue included in its portal submissions. However, the budgeted amounts for patient care revenue relating the Agency's fiscal years for 2021, 2022, and 2023 were not approved prior to March 27, 2020; therefore, option ii was not available to be used. The Agency should have selected option iii in its portal submissions. The Agency used the same methodology for the Period 2 portal submission, even though the budgets related to that full Period of Availability were not approved prior to March 27, 2020. As of June 30, 2023, the Agency was only required to complete portal submissions for Period 2 and Period 4.
Cause and Effect - Review of the reporting guidance was not effective and led to the selection of a lost revenue methodology that was not available. As a result, the Agency selected an incorrect methodology option (option ii) for reporting lost revenue.
Recommendation - We recommend that the Agency implement controls, including levels of review, to ensure that reports are completed and submitted in accordance with the guidelines established by HHS.
Views of Responsible Officials and Corrective Action Plan - The Agency agrees option iii should have been used for portal submissions and will implement additional reviews over future award applications.