FAC Explorer

Finding 404097 (2023-001)

Material Weakness
Requirement
ABL
Questioned Costs
$1
Year
2023
Accepted
2024-06-28
Audit: 310873
Organization: Midland County Hospital District (TX)
Auditor: Forvis Mazars LLP

AI Summary

  • Core Issue: The District reported $1,754,432 in expenditures for utility and insurance that did not meet HRSA guidelines for COVID-19 relief funding.
  • Impacted Requirements: Expenditures must be directly related to the prevention, preparation, or response to COVID-19 as per federal guidelines.
  • Recommended Follow-Up: Update policies and procedures to ensure compliance with federal grant reporting and proper allocation of expenses.

Finding Text

COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or specific requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) and Reporting (45 CFR 75.342). Condition: The District included certain expenditures within the Period 4 reporting that were not eligible under HRSA guidelines. Questioned costs: $1,754,432 – Calculated as the value of reported utility and insurance expenditures that were not related to the District’s prevention, preparation and/or response to the COVID-19 pandemic. Context: The Period 4 Provider Relief Fund (PRF) report was submitted and included utility and insurance expenditures. These expenditures were not directly related to the prevention, preparation, or response to the COVID-19 pandemic as required by HRSA guidelines. Cause: Internal controls were not in place to ensure the District appropriately charged expenditures to this award as required by HRSA guidelines. Effect: The District submitted expenditures under the PRF program that were not directly related to the prevention, preparation, or response to the COVID-19 pandemic as required by HRSA guidelines. Identification as a repeat finding: N/A Recommendation: Policies and procedures over federal grant reporting should be modified to ensure distributions are utilized for expenses directly related to the prevention, preparation, and response to coronavirus as required. Views of responsible officials and planned corrective actions: See attached corrective action plan for the District’s response to finding.

Corrective Action Plan

Management agrees with the finding that the Period 4 Provider Relief Fund report included expenses for utility and insurance expenditures that were not directly related to the District's prevention, preparation and/or response to the COVID-19 pandemic. Management reviewed HRSA guidance and examples of allowable expenses prior to completing Period 4 Provider Relief Fund reporting and concluded these expenses were considered allowable as general and administrative expenses incurred during our response to the COVID-19 pandemic. Management notes that expenses and lost revenue reported exceed the amount of PRF funding received even if these expenses were excluded. We have taken corrective action for the review of completeness and accuracy for inclusion of allowable expenditures. PRF reporting, subsequent to this audit, will be reviewed prior to submission to ensure accuracy of reporting. Chief Financial Officer, Marie Castro, is responsible for ensuring the corrective action plan is followed. The corrective action plan will be implemented on June 30, 2024.

Categories

Questioned Costs Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 980539 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund (prf) and American Rescue Plan (arp) Rural Distribution $3.42M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.46M