Finding Text
2022-005 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over Compliance and Material Noncompliance for ReportingCriteria: 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 Hospital claimed expenses that were incurred prior to when the Hospital began to prepare for, prevent and respond to the coronavirus. The Hospital also claimed expenses within ?Other PRF Expenses? that were funded by other sources. The Hospital offset these other funding sources in later periods out of the ?Other Unreimbursed Expenses?. This resulted in the incorrect categorization of expenses on the special report submitted to the Department of Health and Human Services (HHS) for Period 1 which caused the report to be inaccurate.Cause: The terms and conditions were not properly reviewed to ensure claimed expenses were allowable under the federal program and claimed with the special report submitted to HHS for Period 1.Effect: There were $1,048,162 of expenses claimed and reported incorrectly in the special reported submitted to HHS for Period 1.Questioned Costs: None reported for activities allowed or unallowed and allowable costs/cost principles as expenses that were originally reported in the Unreimbursed Expenses Attributable to Coronavirus section of the special report submitted to HHS for Period 1 TIN #376020408 were tested to cover the amount of unallowed expenses.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles. Key line items were tested on the special report submitted to HHS for Period 1.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure expenditures claimed under the federal program meet the terms and conditions and are properly included in the reports required to be submitted to the federal agency. We recommend management to update any future special reports submitted to HHS as deemed appropriate.Views of Responsible Officials: Management agrees with the finding.