Finding Text
Information on the federal program:Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA)Assistance Listing No.: 93.498, Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF)Award Period of Performance: 01/01/21 ? 12/31/21Criteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?The terms and conditions of the award require the recipient to submit reports to the secretary of Health and Human Services (HHS) for each reporting period to ensure compliance with conditions that are imposed on the payment, and such report shall be in such form, with such content, as specified by the secretary of HHS in program instructions directed to all recipients.Condition:Management did not have sufficiently designed internal controls over the review of lost revenue calculation to ensure that the lost revenue submitted in the HRSA PRF reporting portal was not duplicated between the General Distribution in the HRSA PRF report and the stand-alone subsidiary Targeted Distribution HRSA PRF reports.Cause:Management?s internal controls over the review and approval of the lost revenue calculation were not precise enough to identify that lost revenues transferred from the parent entities General Distribution to the subsidiaries were not duplicated in the subsidiary HRSA PRF Reports.Effect or potential effect:The lost revenues reported for the Corporation were overstated in the HRSA PRF portal for period 4.Questioned costs:None.Context:There was a total of eight HHS PRF portal submissions for reporting periods 3 and 4. We tested the eight HHS PRF portal submissions and underlying lost revenue calculations.For reporting period 4, there was one general distribution to the Beacon Health System (the Parent) and six targeted distributions for six subsidiaries. We note that the lost revenue was overstated in the HHS PRF portal for the Parent consolidated entity as it included the lost revenues reported by the individual subsidiaries for ARP funding. Total Lost Revenues for the Period of Availability (January 1, 2020 to December 31, 2022) reported in the reporting period 4 General Distribution was $127,672,973. The correct amount of lost revenue reported for reporting period 4 should have been $125,214,988.The Parent had sufficient lost revenue to cover the General Distribution; therefore, there are no questioned costs.Total PRF lost revenue on the SEFA is $14,518,741 for the year ended December 31, 2022.Identification as a repeat finding, if applicable:No.Recommendation:We recommend that management implement more robust management review internal controls to ensure accurate reporting in the HRSA PRF portal.Views of responsible officials:The Corporation agrees with the finding and noted this duplication via memorandum as part of the general submission. In the future, the Corporation will remove any individual submissions from the general submission and reconcile the general submission to the supporting documentation less these individual submissions. The Corporation does not expect to receive any further funding from the ARP or PRF and has no further reporting requirements under this grant.