Finding 401825 (2023-002)

2023‐002 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 #411804205 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ‐ 2 CFR 200.33(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 statues, regulations, and conditions of the federal award. The Medical Center is required to submit an accurate report to HHS for the filing period that funds were received. Condition ‐ The Medical Center claimed lost revenues attributable to coronavirus in which the revenue calculation did not agree to the HHS special report for one key line item. Cause ‐ The Medical Center had a revenue calculation error of $192,326 on the HHS special report with no impact to the actual lost revenues as the quarter with the error did not result in any lost revenue being reported (i.e., lost revenue claimed was accurate on the HHS special report but key line items were misstated). Effect ‐ While the calculation error did not provide a difference in total between the lost revenues utilized on the HHS special report and the lost revenue calculation, the Medical Center’s reported quarterly resident revenues were inaccurate. This calculation error also indicated a lack of proper reconciliation between the Medical Center’s audited financial statements and the revenues reported within the HHS special report. Questioned Costs ‐ None reported. Context ‐ There were 40 lost revenue key line items tested on which one key line item contained an error which totaled $192,326 (explicit price concessions were overstated for one quarter). The error had no impact on the amount of lost revenue as the quarter impacted did not result in any lost revenue. Repeat Finding from Prior Years – No Recommendation ‐ We recommend that the Medical Center enhance internal control policies to ensure the HHS special report is supported by accurate revenue calculations. This would include reconciling the lost revenue calculation to the audited financial statements within the secondary review of the HHS special report. Views of Responsible Officials ‐ Management agrees with the finding.