Finding Text
2023-001 Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting; Federal Agency: U.S. Department of Health and Human Services; Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (ALN 93.498); Pass-through Entity: N/A; Federal Assistance Identification Number or Pass-Through Number: N/A; Federal Award Year: Year ended June 30, 2023; Type of Finding: Material Weakness in Internal Control over Compliance; Other Matter Compliance Finding; Criteria: 2 CFR 200.303(a) requires that each non-Federal entity must "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."; In addition, per the Health Resources and Services Administration (HRSA) reporting guidance, providers who accepted provider relief fund (PRF) payments agreed to the Terms and Conditions of the program, which included a requirement to report on the use of funds. Providers who received one or more payments totaling greater than $10,000 in the aggregate during a payment received period must report on use of funds in each applicable reporting period. Condition: UW Health did not maintain effective internal controls over allowable costs, cost principles and reporting for the PRF program for Periods 4 and 5. In addition, during our testing we noted errors in the amount of revenue reported in the portal. This resulted in an overstatement of actual 2020 revenues of $10,000 and an understatement of actual 2021 revenues of $1,000,002 on the Period 4 and Period 5 portal submissions, respectively, for the University of Wisconsin Medical Foundation, Inc. (UWMF). Cause: The client did not perform internal control procedures that had been in place in previous years as much of the information in the PRF submission had been reviewed previously. Effect: Revenue reported in the UWMF's PRF reporting portal was misstated for several quarters, resulting in a total overstatement of actual 2020 revenues of $10,000, and a total understatement of actual 2021 revenues of $1,000,002. However, if the revenues were reported correctly, it would have still resulted in enough lost revenue to fully earn the funds received. Context: The errors were present in the UWMF reporting submissions completed for reporting Period 4 and 5. Questioned Costs: None; Repeat Finding?: No; Recommendation: We recommend management conduct training with individuals involved in the administration of federal and state grants to stress the importance of performing internal control activities for all compliance requirements. View of responsible officials of the auditee: Management agrees with the finding. See corrective action plan.