Finding 395578 (2023-002)

Significant Deficiency Repeat Finding

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: There was a significant deficiency in internal controls related to reporting lost revenues for the Provider Relief Fund, leading to an overstatement of $81,803.
Impacted Requirements: Compliance with 2 CFR 200.303(a) and specific reporting requirements from the U.S. Department of Health and Human Services was not effectively maintained.
Recommended Follow-Up: Management should implement stronger review procedures to catch errors in reporting before submission to ensure accuracy in future reports.

Finding Text

Finding 2023-002 - Significant Deficiency in Internal Control – Reporting 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 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 to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition/Context: The Corporation used the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3) for measuring lost revenues. In the Corporation's Period 4 submission for Robert Packer Hospital, TIN 24-0795463, total lost revenues were incorrectly reported as $13,011,879, rather than $12,930,176. Total lost revenues available to be used in this reporting period based on the adjusted amount was $7,142,168 on payments in the period of $7,142,168. This is not a statistically valid sample. Effect: Lost revenue reported to Health Resources and Services Administration (HRSA) were overstated by $81,803. After correcting for this error, available lost revenues were equal to the payments received for the period of $7,142,768. Cause: An oversight by management during the review process that failed to identify the error in the reporting of lost revenues. 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 increased the level of review over the lost revenue calculations for future reporting periods. Management did not believe that further corrections to the Period 4 report were necessary as the remaining available lost revenues after adjusting for the error were equal to the payments received in the period and there was no further submissions necessary for Robert Parker Hospital.

Corrective Action Plan

Finding 2023-002 Condition/Context The Corporation used the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3) for measuring lost revenues. In the Corporation's Period 4 submission for Robert Packer Hospital, TIN 24-0795463, total lost revenues were incorrectly reported as $13,011,879, rather than $12,930,176. Total lost revenues available to be used in this reporting period based on the adjusted amount was $7,142,168 on payments in the period of $7,142,168. This is not a statistically valid sample. Corrective Action Plan Corrective Action Planned: The Corporation agrees with the finding. Management increased the level of review over the lost revenue calculations for future reporting periods. Management did not believe that further corrections to the Period 4 report were necessary as the remaining available lost revenues after adjusting for the error were equal to the payments received in the period and there was no further submissions necessary for Robert Parker Hospital. Name(s) of Contact Person(s) Responsible for Corrective Action: Sean Monahan, Corporate Financial Controller and Fran Macafee, VP, CFO – Guthrie Lourdes Hospital. Anticipated Completion Date: September 30, 2023

Other Findings in this Audit

395577 2023-001

Significant Deficiency
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