Finding 43557 (2022-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2022-12-06
Audit: 38479
Organization: Kuakini Health System (HI)
Auditor: Accuity LLP

AI Summary

  • Core Issue: $84,800 in costs were reported that were incurred before the allowed period, leading to an overstatement of carryover costs.
  • Impacted Requirements: Management failed to implement adequate internal controls for compliance with federal reporting requirements.
  • Recommended Follow-Up: Management should enhance their review process for cost reporting and correct the cumulative amounts in the upcoming submission.

Finding Text

Questioned Costs $ - Finding No. 2022-002: Reporting (Significant Deficiency) Federal Agency: Department of Health and Human Services AL Number and Title: 93.498 ? Provider Relief Fund Award Number: N/A Award Year: 2021 Repeat Finding? No Condition During our audit, we tested all period 2 infection control targeted distribution expenses reported and noted the reported amount included $84,800 in costs incurred prior to the period of availability. Criteria Management is responsible for establishing a system of internal controls that will assist in the Health System?s compliance with the program?s reporting requirements specified in the Health Resources and Service Administration Provider Relief Fund Distributions and American Rescue Plan Rural Distributions Post Payment Notice of Reporting Requirements. Effect Lack of review over the reporting of eligible infection control costs to the federal agency resulted in an overstatement of reported carryover costs for the program?s periods 2 and 3 targeted distributions. As there were other eligible expenses during period 2 to offset the $84,800 in costs incurred prior to the period of availability, the infection control costs reported were correct. However, the eligible carryover balances were overstated in the periods 2 and 3 reports submitted. Cause A review was not performed to ensure reported period 2 infection control costs were proper based on the guidance set forth in the Title 2 U.S. CFR Part 200, which resulted in reporting ineligible costs. Recommendation We recommend that management follow their review process over the reporting of all costs applied towards targeted distributions to ensure proper reporting to the federal agency. We also recommend and management plans to correct cumulative amounts reported in the period 4 submission. Views of Responsible Officials and Planned Corrective Actions Refer to the Corrective Action Plan (Unaudited) for the Health System?s response to the identified deficiency.

Corrective Action Plan

Finding No. 2022-002: Reporting (Significant Deficiency) Action Management implemented procedures for review of the expenses to be reported for infection control. For the fiscal year ended June 30, 2022, a review was conducted but only against the General Ledger report for the reporting period. Rather than relying solely on the General Ledger report, each invoice listed on the report will be pulled from Accounts Payable and reviewed both by the Controller and CFO to ensure the appropriateness of the expense to be reported on the PRF report prior to submission.

Categories

Internal Control / Segregation of Duties Eligibility Reporting Significant Deficiency

Other Findings in this Audit

  • 619999 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $5.75M
93.859 Biomedical Research and Research Training $1.82M
93.866 Aging Research $183,143
93.889 National Bioterrorism Hospital Preparedness Program $11,244
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $279