Finding 395729 (2023-004)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-05-02

Audit: 305361

Organization: Central Montana Medical Center (MT)

Auditor: Eide Bailly LLP

AI Summary

Core Issue: Internal controls over compliance were ineffective, leading to inaccurate reporting of lost revenue for Period 4.
Impacted Requirements: Compliance with 2 CFR 200.303(a) was not met, as the Facilities failed to account for year-end audit adjustments in their quarterly reports.
Recommended Follow-Up: Management should strengthen internal controls and conduct thorough reviews to ensure accurate reporting of net patient care revenue.

Finding Text

Department of Health and Human Services Federal Assistance Listing/# 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 # TIN #237169043 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Facilities did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 4 to ensure accurate quarterly reporting of net patient revenue. Effect: Key line items for reporting related to lost revenue were materially misstated. No lost revenue was claimed during the current period. Questioned Costs: None reported. Context/Sampling: Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No. Recommendation: Management should enhance its internal controls over federal award compliance and review to ensure proper reporting of net patient care revenue. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

2023‐004 – Year Ended June 30, 2023 Department of Health and Human Services Federal Assistance Listing/# 93.498 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Finding Summary: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Facilities did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue. Key line items for reporting related to lost revenue were materially misstated. No lost revenue was claimed during the current period. Responsible Individual: Perry Howell, CFO Corrective Action Plan: The Facilities will enhance internal control policies to ensure all amounts are adequately documented and properly recorded in the reports required to be submitted to the federal agency. The Hospital will enhance internal control policies to ensure that the required reports are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. Anticipated Completion Date: June 2024

Other Findings in this Audit

395730 2023-005

Significant Deficiency
972171 2023-004

Material Weakness
972172 2023-005

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
93.498	Provider Relief Fund	$1.10M
93.155	Rural Health Research Centers	$112,338
93.697	Covid-19 Testing for Rural Health Clinics	$100,000