Finding 42912 (2022-001)

Material Weakness
Requirement
ABL
Questioned Costs
$1
Year
2022
Accepted
2023-08-16
Audit: 39407
Auditor: Forvis LLP

AI Summary

  • Core Issue: The Medical Center submitted a Provider Relief Fund report that included $1,525,701 in questionable expenses related to rent, lease, and insurance not tied to COVID-19 response efforts.
  • Impacted Requirements: Compliance with reporting standards (45 CFR 75.403 and 45 CFR 75.342) is critical; inaccurate financial reporting can lead to unallowable costs.
  • Recommended Follow-Up: Revise policies and procedures for federal grants to ensure only allowable expenses are reported, and enhance accuracy in financial reporting.

Finding Text

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or specific requirement ? Activities Allowed/Unallowed and Allowable Costs and Cost Principles (45 CFR 75.403) and Reporting (45 CFR 75.342) Condition ? The Medical Center is required to prepare and submit Provider Relief Fund reports. The reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned costs ? $1,525,701 ? Calculated as the value of reported rent, lease and insurance expenditures that were not related to the Medical Center?s prevention, preparation and/or response to the COVID-19 pandemic. Context ? The Period 2 Provider Relief Fund report was submitted and included rent, lease and insurance expenditures. The Medical Center?s submitted report includes the operations of the Medical Center?s nursing home facilities. The nursing home facilities are managed by a third party company. The Medical Center compiled the nursing home facility?s expenditures as submitted and included in their submitted Period 2 report. One nursing home facility manager was unable to justify that the expenditures charged to the grant were related to the prevention, preparation and/or response to the COVID-19 pandemic. Effect ? Expenses may not be allowable. Cause ? The Medical Center did not properly report Other PRF expenditures. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grants should be modified to ensure federal funding is not used to reimburse expenses that are not allowable and that reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the Medical Center?s response to finding.

Corrective Action Plan

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or specific requirement ? Activities Allowed/Unallowed and Allowable Costs and Cost Principles (45 CFR 75.403) and Reporting (45 CFR 75.342) Condition ? The Medical Center is required to prepare and submit Provider Relief Fund reports. The reports are to be prepared using accurate financial information and submitted by the deadline established. Questioned costs ? $1,525,701 ? Calculated as the value of reported rent, lease and insurance expenditures that were not related to the Medical Center?s prevention, preparation and/or response to the COVID-19 pandemic. Context ? The Period 2 Provider Relief Fund report was submitted and included rent, lease and insurance expenditures. The Medical Center?s submitted report includes the operations of the Medical Center?s nursing home facilities. The nursing home facilities are managed by a third party company. The Medical Center compiled the nursing home facility?s expenditures as submitted and included in their submitted Period 2 report. One nursing home facility manager was unable to justify that the expenditures charged to the grant were related to the prevention, preparation and/or response to the COVID-19 pandemic. Effect ? Expenses may not be allowable. Cause ? The Medical Center did not properly report Other PRF expenditures. Identification as a repeat finding, if applicable ? Not a repeat finding. Recommendation ? Policies and procedures over federal grants should be modified to ensure federal funding is not used to reimburse expenses that are not allowable and that reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions ? See attached corrective action plan for the Medical Center?s response to finding.

Categories

Questioned Costs Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 619354 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $9.50M
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $388,005
93.959 Block Grants for Prevention and Treatment of Substance Abuse $58,392