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 1 TIN #352276246
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and 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 Authority claimed expenses that were previously claimed and reported on
the Period 1 report to the Department of Health and Human Services (HHS).
Cause: The Authority misunderstood the reporting requirements on the Period 4 report to
HHS and believed the section related to expenses incurred required all expenses for the
program from inception, including those claimed on previous reports, be included.
Effect: The Authority claimed and reported expenses that were previously claimed and
reported in Period 1 report to HHS. Accordingly, the Authority technically claimed expenses
already reimbursed by the program and the Period 4 report to HHS contained material
errors.
Questioned Costs: None reported. While $502,982 of expenses were claimed on the Period 1
report to HHS, the Authority reported excess lost revenues totaling $4,674,489. The
Authority intended to utilize available lost revenues when reporting.
Context: All key line items were tested on the Period 4 report to HHS. The total error was
identified when reconciling the expense details to the Period 4 report to HHS. No sampling
was utilized related to this finding.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Authority modify internal control policies to ensure
there is an understanding of reporting requirements to ensure that reports are accurate and
amounts are not inadvertently claimed that are considered unallowable.
Views of Responsible Officials: Management agrees with the finding.