Finding Text
Finding 2022-01 ? Reporting Identification of the federal program: Assistance Listing No. 93.498 ? COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Criteria or specific requirement (Including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (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).? Providers who received one or more PRF or ARP payments greater than $10,000 in the aggregate were required to report on the use of the funds to the Health Resources & Services Administration (HRSA) Reporting Portal. The U.S. Department of Health and Human Services (HHS) requires the nonfederal entity to report lost revenue in order to support that funding received has been appropriately earned. HHS provided specific guidance in the June 11, 2021 Post-Payment Notice on how to complete the required reporting of lost revenue in the HRSA Reporting Portal. Under this guidance, recipients may choose to apply PRF and ARP payments towards lost revenue using one of the following options: ? Option i ? Up to the amount of the difference between actual patient care revenue ? Option ii ? Up to the amount of the difference between budgeted and actual patient care revenue, if the budget was established and approved prior to March 27, 2020 ? Option iii ? Up to the amount calculated by any reasonable method of estimating revenue Condition: Indiana University Health?s reporting submissions did not follow the published HRSA guidance related to the reporting of lost revenue. Cause: While Indiana University Health had designed and implemented internal controls over the allowability of expenses and amounts submitted in the HRSA and ARP reports, these internal controls were not precise enough to identify the submissions were not compliant with HRSA reporting guidance. Effect or potential effect: Noncompliance with HRSA reporting guidance could result in the submission of ineligible lost revenue to the HRSA Reporting Portal. Questioned costs: None. Context: We inspected the reconciliations of lost revenue to the Period 3 and Period 4 reports, determining the lost revenue submitted under Period 3 and Period 4 was based on the difference between actual and budgeted patient care revenue based on the 2022 budget, which was not approved prior to March 27, 2020. Management indicated the selection of Option ii was based on discussions with HRSA during the spring of 2022. Total federal expenditures for Assistance Listing No. 93.498 totaled $79,209,671 for the year ended December 31, 2022, which included $19,428,311 in lost revenue. Identification as a repeat finding: This is not a repeat finding. Recommendation: HRSA does not allow reporting entities to amend a previously submitted report after the reporting period has passed. Indiana University Health should plan to complete the Period 5 submissions using Option iii for the calculation of lost revenue, if a budget approved prior to March 27, 2020 does not exist. Views of responsible officials: Indiana University Health believes it appropriately designed and implemented the appropriate policies, procedures, and internal controls over the PRF and ARP reporting requirements. However, Indiana University Health agrees that the 2022 budget was not approved prior to March 27, 2020, but management asserts the Period 3 and Period 4 reports were filed in accordance with guidance obtained directly from HRSA. Furthermore, management asserts the amount of lost revenue submitted for Period 3 and Period 4 would not change, regardless of the lost revenue option selected.