Finding 505379 (2022-001)

2022-001 Finding: Activities Allowed or Unallowed Costs/Cost Principles Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed/Unallowed and Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub.. L. No. 116-139, 134 Stat. 622 and 623) Condition – The District is required to only use funds on costs associated with items and services outlined in the terms and conditions for “Infection Control Expenses” that are not reimbursed by other types of funding. Questioned Costs – $13,839 Context – The District had several staff working on administering COVID-19 tests to residents of the nursing home. As such, the expenditures related to these employee’s time used for testing were estimated using an average of wages for the employees focused on administering the tests and the estimated number of hours each day it took to perform the tests. Additionally, tests were included in allowable expenditures which were reimbursed by third-party payors. Cause – The district controls were not functioning for review of allowable costs. Effect – The auditor was unable to substantiate the estimated amount. Additionally, immaterial amounts of expenditures were reimbursed by multiple parties. Identification as a repeat finding – Not a repeat finding. Recommendation - Policies and procedures over federal grant spending should be modified to ensure support is reviewed and maintained for all expenditures. Views of responsible officials and planned corrective actions – The District agrees with the finding. See separate auditee document for planned correction action.