Finding 394257 (2023-001)

Identifying Number: Finding 2023-01—Reporting Finding: Assistance Listing No. 93.498—COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Criteria or specific requirement: Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (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.” The U.S. Department of Health and Human Services (HHS) requires the nonfederal entity to report lost revenue in order to support that funding received has been appropriately earned. HHS provided specific guidance in the June 11, 2021, Post-Payment Notice on how to complete the required reporting of lost revenue in the HRSA Reporting Portal. Condition: Summa’s reporting submission did not follow the published HRSA guidance related to the reporting of lost revenue. Cause: Summa had designed and implemented internal controls over the calculation of lost revenue, however, these internal controls were not precise enough to identify an error in the calculation of lost revenue. Effect or potential effect: Noncompliance with HRSA reporting guidance could result in the submission of an inaccurate report. Questioned cost: None Context: We inspected the reconciliation of lost revenue for Summa Health TIN 34-1887844 noting that the lost revenue calculation was overstated by approximately $1.1 million and $3.0 million for Q3 2020 and Q4 2020, respectively. Recommendation: HRSA does not allow reporting entities to amend a previously submitted report after the reporting period has passed and period 6 is the last reporting period associated with this funding. The internal calculation should be revised to accurately reflect the lost revenue incurred for Q3 2020 in the event supporting documentation is requested to justify the funding received. Corrective Actions Taken or Planned: Management agrees that the calculation should be revised in the event supporting documentation is requested to justify the funding received.