Finding 509789 (2023-002)

Finding 2023-002: Revenue reported in PRF submission was overstated for 2nd quarter in 2021 and the 2nd quarter of 2022 Federal Assistance Listing Number Name of Federal Program or Cluster 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HRSA requires entities to report quarterly net patient revenue under the PRF reporting requirements that is net of adjustments for all third-party payers, charity care adjustments, bad debt, and any discounts or adjustments. Condition: Management’s submission reported revenues for the second quarter of 2021 gross of adjustments for bad debt. Context: The condition was noted during our testwork over the quarterly reported revenues. Cause: Management was unaware of the requirement to report patient revenue net of adjustments. Effect: Amount reported for the 2nd quarter of 2021 and the 2nd quarter of 2022 were overstated resulting in lost revenues that were higher than actual. This had no effect on lost revenue recovered by the Organization since the corrected lost revenue remained higher than the amount provided by the PRF program. Questioned Costs: None Repeat Finding: Yes, 2022-002 Recommendation: We recommend that management become familiar with all PRF reporting requirements should additional funds become available. View of Responsible Official: See Corrective Action Plan