Finding 42533 (2022-002)

Material Weakness: Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Reporting Material Weakness in Internal Control Over Compliance 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. The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are to only be used to prevent, prepare for, and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 and Period 2 reporting required an organization to illustrate how PRF funds received were used. An organization was allowed to include lost revenue attributable to coronavirus from January 1, 2020 through December 31, 2021 depending on the period reporting. Condition: During the process of identifying lost revenues attributable to coronavirus, management reported all lost revenue as Medicaid. However, support provided by management indicated that lost revenue was also identified for self-pay revenue and other payors. Cause: Mosaic?s internal control policy did not ensure that eligible lost revenue followed applicable reporting guidance. Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently failed to report lost revenue by payer. Effect: Management failed to disaggregate by payer amounts in the PRF reporting portal for lost revenue. Questioned Costs: None reported. Context: Key line items were tested on the Period 2 HHS report. Recommendation: We recommend that management enhance its existing internal control processes to ensure the lost revenue reporting meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding. Management will continue to refine its processes to more diligently review the lost revenue reporting key lines to ensure such amounts are in accordance with the terms and conditions of the federal award.