Finding Text
2023-002 U.S. Department of Health and Human Services
Federal Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 4 TIN #810515463
Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting
Significant Deficiency in Internal Control over Compliance
Criteria – 2 CFR 200.303(a) establishes that the auditee must establish and maintain
effective internal control over the federal award that provides assurance that the entity
is managing the federal award in compliance with federal statutes, regulations, and
conditions of the federal award. The Corporation claimed expenses based on specifically
identified COVID related expenses and COVID related incremental expenses. The
Corporation selected Option i and Option iii to calculate lost revenue (this varied based
on specific entity).
Condition – During our testing, we noted reviews were performed over individual
eligible expenditures; however, there was no formal review or approval of the
expenditure spreadsheet used to calculate the expenditures claimed for the federal
program outside of the preparer at the LH Chester location. In addition, there was no
evidence retained that the Corporation’s HHS Special Report submitted to the
Department of Health and Human Services for Period 4 was reviewed and approved by a
separate individual outside of the preparer at the LH Chester location.
Cause – The Corporation did not have an adequate internal control policy in place to
ensure review and approval over tracking of other funding sources, lost revenue, or
reporting was documented at all locations.
Effect – The lack of adequate policies governing review increases the risk that
employees participating in the federal award administration may not be able to detect
and correct noncompliance in a timely manner.
Questioned Costs – None reported.
Context/Sampling – Detail testing was performed over eligible expenditures for
activities allowed and unallowable and allowable cost/cost principles. There were nine
HHS Special Reports in the population and all were tested of which one did not have
documented evidence of proper review.
Repeat Findings from Prior Years – No.
Recommendation – We recommend that the Corporation enhance internal control
policies to ensure that formal documentation of reviews is present at for all supporting
documentation and reports all locations.
Views of Responsible Officials – Management agrees with the finding.