Finding 502370 (2023-003)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-10-10

AI Summary

  • Core Issue: Management reported lost revenue inaccurately, leading to a significant understatement of $3,842,567.
  • Impacted Requirements: Reporting must align with methodologies in the compliance supplement; discrepancies exist between reported and actual figures.
  • Recommended Follow-Up: Management should seek HRSA's approval to amend the PRF Period 5 submission to correct the reported amounts.

Finding Text

Finding 2023-003: Incorrect Reporting of Lost Revenue Federal Agencies U.S. Department of Health and Human Services Program Name (Federal Assistance Listing Number) COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Criteria or specific requirement Lost revenue is required to be reported in the PRF reporting portal in accordance with one of the three methodologies included in the compliance supplement. Condition Management elected to report actual lost revenue in their PRF Period 5 submission, however lost revenue does not agree to management’s underlying general ledger or audited financial statements and could not be reconciled to reported amounts for all reporting periods from 2019 through June 30, 2023. Cause Due to changes in management and limited staffing, current management was unable to locate the reconciliations used to report lost revenue in the PRF Period 5 submission. Effect Although the Center reported lost revenue of $22,678,671, actual lost revenue per the Center’s general ledger and audited financial statements should have been $26,521,238. Accordingly, management understated lost revenue by $3,842,567. Questioned Costs None Context The Center’s changes in management personnel led to current management's inability to locate any reconciling items that may have been used by the predecessor management team in reporting period 5 lost revenues. Identification of a repeat finding No   Recommendation Management should contact HRSA for permission to amend their PRF Period 5 submission. Views of responsible officials See corrective action plan

Corrective Action Plan

Finding Reference Number 2023-003 1. Name of contact person responsible for corrective action Annmarie Covone, Executive Vice President/Chief Financial Officer 2. Corrective action planned 3. Our organization will reach out to HRSA to request permission to resubmit our PRF period 5 submission’s lost revenue so that lost revenue will agree to our underlying records and audited financial statements. 4. Anticipated Completion Date This will be completed in October 2024. 5. If the client does not agree with the findings or believes corrective action is not required, include an explanation and specific reasons We agree with Finding Reference No. 2023-003 Contact Information Annmarie Covone Executive Vice President/Chief Financial Officer 205 Lexington Avenue, 2nd Floor, New York, NY 10016 P (646) 633-4702 acovone@archcare.org

Categories

Reporting

Other Findings in this Audit

  • 502368 2023-001
    Significant Deficiency
  • 502369 2023-002
    Significant Deficiency
  • 502371 2023-002
    Significant Deficiency
  • 1078810 2023-001
    Significant Deficiency
  • 1078811 2023-002
    Significant Deficiency
  • 1078812 2023-003
    Significant Deficiency
  • 1078813 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.129 Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $10.15M
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $416,964