Finding Text
Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund and American Rescue Plan Rural Distribution (PRF); Noncompliance Finding/Material Weakness; Reporting Compliance Requirements Criteria: The Provider Relief Fund and the American Rescue Plan Rural Distribution was established under the Coronavirus, Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and the Coronavirus Relief and Response Supplemental Appropriations Act (Pub. L. No. 116-260) and the American Rescue Plan Act of 2021 (Pub. L. No. 117-2) . The PRF and ARPA funds are to be used to prevent, prepare for, and respond to coronavirus. The PRF and ARPA funds are to reimburse recipients for health care related expenses or lost revenues that are attributable to coronavirus. Condition: The Hospital did not meet the requirement that the PRF and ARPA funds be used to reimburse recipients for lost revenues that are attributable to coronavirus. Cause: The Hospital had multiple errors in calculating lost revenues for the Period 4 reporting submission (other than the error noted in 2021-006). The Hospital did not take into account audit adjusting journal entries for the fiscal year ended July 31, 2022, for the quarters impacted. Included in the audit adjusting journal entries was the cost report settlement entry that impacted all quarters. In addition, the Hospital did not include an estimated impact to fiscal year ended July 31, 2023, for the cost report settlement for the quarters impacted. The Hospital did include an audit adjusting journal entry that impacted 340(b) drug program revenue but incorrectly recorded it to the 3rd quarter of 2022 instead of allocating it to the applicable quarters. The spreading of audit adjusting journal entries and the cost report settlement impact to the applicable quarters was completed for actual revenues for the comparable quarters for 2019. Effect: The Hospital's lost revenues were misstated. Questioned costs: Unknown Perspective Information: We tested the calculation of lost revenues per the recreated spreadsheet to monthly internal financial statements, audited financial statements, and other supporting documentation to determine if the report was compiled accurately. Multiple errors were noted in reconciling to the audited financial statements, including not allocating journal entries to the quarters impacted. Repeat Finding: N/A Recommendations: We recommend policies and procedures over PRF and ARPA reporting be strengthened to ensure that revenues used in the calculation of lost revenues are reconciled to internal and audited financial statements and that general journal and audit entries are assessed to determine the appropriate quarter to be applied to for the lost revenue calculation. Views of Responsible Officials: The Hospital has recalculated lost revenues to incorporate the audit adjusting journal entries for the fiscal year ended July 31, 2022, for quarters impacted, incorporate the cost report settlement impact across all quarters impacted, and to include an estimated impact of the cost report settlement for quarters impacted for the fiscal year ended July 31, 2023. In addition, the revised calculation includes the correction needed to remove the 340(b) drug program expenses as noted in finding 2023-006 and to reconcile to supporting documentation as noted in finding 2023-005. The Hospital will work with the Department of Health and Human Services to correct the reporting. In the future, the Hospital will maintain adequate supporting documentation for the calculation of lost revenues and will ensure the accuracy and completeness of the amounts reported by reconciling to the audited financial statements, internal financial statements, and other source documentation. The Hospital will be cognizant of items that are posted in one period that apply to multiple periods and accurately including those items in the calculation. In addition, the Hospital will be proactive in getting necesarry training and education regarding the allowable uses of federal funding received in future years.