Finding 395577 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-05-01

Audit: 305185

Organization: The Guthrie Clinic (PA)

Auditor: Baker Tilly US LLP

AI Summary

Core Issue: The internal control process failed to catch calculation errors in the pay for event program, affecting the accuracy of reported costs.
Impacted Requirements: Compliance with 2 CFR 200.303(a) was not met, as effective internal controls were lacking in the review process.
Recommended Follow-up: Management should enhance review procedures to ensure all reported information is accurate and errors are corrected before submission.

Finding Text

Finding 2023-001 - Significant Deficiency in Internal Control – Activities Allowed or Unallowed, and Allowable Costs/Cost Principles Assistance Listing No.: 93.498 COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not applicable Award Number: Not applicable Award Year: 2021/2022 Questioned Costs: None reported Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award. Condition/Context: The Corporation’s review process failed to detect errors in the calculation of amounts related to the pay for event program that were applied to the Federal award. Errors were discovered in 8 of the 44 items tested for the pay for event program which would have increased the allowable costs eligible for reimbursement under the Federal award by $671. This is not a statistically valid sample. Effect: Expenses applied to the Federal award were not impacted as the errors would have increased the allowable costs eligible for reimbursement. Internal controls related to the review of calculations under the pay for event program were not effective in identifying errors prior to reporting. Cause: An oversight by management during the review process that failed to identify the error in underlying support for pay for event calculations. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding. Management implemented an enhanced review process to validate all amounts reported on the PRF Reporting Portal submission, and to ensure compliance with existing policies and terms and conditions of the Provider Relief Funds. Further action was not considered necessary as the errors would result in increased costs eligible for reimbursement under the Federal award and no further funding is available.

Corrective Action Plan

Finding 2023-001 Condition/Context The Corporation’s review process failed to detect errors in the calculation of amounts related to the pay for event program that were applied to the Federal award. Errors were discovered in 8 of the 44 items tested for the pay for event program which would have increased the allowable costs eligible for reimbursement under the Federal award by $671. This is not a statistically valid sample. Corrective Action Plan Corrective Action Planned: The Corporation agrees with the finding. Management implemented an enhanced review process to validate all amounts reported on the PRF Reporting Portal Submission, and to ensure compliance with existing policies and terms and conditions of the Provider Relief Funds. Further action was not considered necessary as the errors would result in increased costs eligible for reimbursement under the Federal award and no further funding is available. Name(s) of Contact Person(s) Responsible for Corrective Action: Kristen Maffei, Manager – Nursing Administration, Sean Monahan, Corporate Financial Controller and Fran Macafee, VP, CFO – Guthrie Lourdes Hospital. Kristen Maffei, Manager – Nursing Administration, Sean Monahan, Corporate Financial Controller and Fran Macafee, VP, CFO – Guthrie Lourdes Hospital. Anticipated Completion Date: This was corrected as of June 30, 2023, and the pay for event program was phased-out after the final Provider Relief Funds were released.

Other Findings in this Audit

395578 2023-002

Significant Deficiency Repeat
972019 2023-001

Significant Deficiency
972020 2023-002

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
93.498	Provider Relief Fund	$25.52M