Finding 393842 (2023-001)

Finding No. 2021-001 - Activities Allowed or Unallowed - Hazard Pay Eligibility Federal Program Assistance Listing Number 21.019 - Coronavirus Relief Fund Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Category Internal Control/Compliance; Significant Deficiency Criteria As stated in the Federal Register, Hazard Pay may be covered using payments from the Coronavirus Relief Fund (the Fund) if it is provided for performing hazardous duty or work involving physical hardship that, in each case, is related to COVID–19. This means that the payroll and benefits of an employee who is substantially dedicated to mitigating or responding to the COVID–19 public health emergency may generally be covered in full using payments from the Fund. Hazard Pay may only be covered to the extent it is directly related to COVID-19. In addition, per the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) guidelines, Hazard Pay is allowable only if it is related to duties to directly respond to COVID-19, independent of the category of employee, usually reserved for First Responders. The guidelines recommend the following model for Hazard Pay: a. First Responders: are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion and are employees performing substantial services within the emergency rooms and the COVID-19 intensive care units. b. Temporary COVID-19 triage areas that a hospital may have established in response to the pandemic. c. The Hazard Pay program suggests the following apportionment for First Responders and the hospital has the discretion to classify the employees within the risk categories stated below: i. Very High Risk: $1,250 each ii. High Risk: $1,000 each iii. Medium Risk: $900 each iv. Lower Risk: $800 each Condition During our audit procedures, we identified certain ineligible employees that were included as part of the Hazard Pay program incentive. Cause The original guidelines issued by the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) for the Hazard Pay program provided a general definition for qualifying employees and that the eligibility criteria could be determined based on the Occupational Safety and Health Administration (OSHA) guidelines. However, such original Hazard Pay program guidelines were subsequently clarified by AAFAF, providing more specific criteria and definitions for qualifying employees. Based on the general guidelines issued by AAFAF, the Hospital included certain employees that did not meet the Hazard Pay program criteria, since the Hospital did not consult with AAFAF about the eligibility of certain Not Substantially Dedicated employees, as defined in the Federal Register. Effect The condition above resulted in the inclusion of ineligible employees in the payment of the Hazard Pay incentive. Questioned Cost Question cost amounted to $6,200 which represents the payments made to ineligible employees. Context Of the 325 employees that received the Hazard Pay incentive, we identified 31 employees that worked on departments not directly related to COVID 19. Total ineligible Hazard Pay incentives paid amounted to $6,200, out of total incentives paid of $125,089. Identification of a repeat finding Yes. This is an immediate repeat of prior year finding 2020-001. Recommendation The Hospital should continue to monitor and review guidelines for federal awards under the CARES Act to ensure it is up-to-date on the applicable requirements and changes therein. In addition, the Hospital should consider consulting with AAFAF when available guidance may be subject to interpretation or when new awards, if any, are received. We recommend the Hospital to revise the guidelines to include only the first responders employees to receive the hazard pay. The meaning of first responders are those employees that, because of the nature of their responsibilities, are continuously exposed to COVID-19 contagion. Views of responsible officials and planned corrective actions The Hospital’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.