Finding 520701 (2023-005)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2023
Accepted
2025-01-29

AI Summary

  • Core Issue: Inaccurate tracking and reporting of $1,461,109 in federal expenditures for the COVID-19 Provider Relief Fund, leading to unsubstantiated costs.
  • Impacted Requirements: Failure to meet documentation and eligibility criteria for expenses related to coronavirus, resulting in potential loss of funding.
  • Recommended Follow-Up: Management should engage with HRSA to develop a corrective action plan and ensure all eligible expenditures are documented for audit purposes.

Finding Text

Finding Number 2023-005 – Inaccurate Tracking and Reporting of Federal Expenditures Federal Program Name COVID-19 Provider Relief Fund CFDA # 93.498 Federal Agency Department of Health and Human Services Criteria The Corporation is responsible for determining whether an expense is eligible for reimbursement through the Provider Relief Fund. To be considered an allowable expense under the Provider Relief Fund, the expense must be used to prevent, prepare for, and respond to coronavirus. In addition, the Corporation is required to maintain adequate documentation to substantiate that these funds were used for health care-related expenses attributable to coronavirus or COVID-19, and that those expenses were not reimbursed from other sources and other sources were not obligated to reimburse them. At the end of the reporting period, the Corporation is required to submit a report to the Health Resources & Services Administration (HRSA) indicating how the Provider Relief Funds were spent and in what timeframe under the prescribed period of availability. Condition During the compliance testing of the Uniform Guidance “Allowable Costs/Cost Principles” and “Reporting” requirements, we noted the following exceptions were noted regarding the initial report of expenditures reported to HRSA for period 5: • There were no amounts indicated as being spent between January 1, 2020 through June 30, 2022. • The report to HRSA indicated that $1,461,109 was spent during the fiscal year 2023 however only $558,598 was allocated to Provider Relief Funds on the Corporations general ledger. • The amounts indicated on the report to HRSA as being qualified expenditures did not appear to have been based on specific needs to prevent, prepare for and respond to coronavirus: o There was not a clear cost allocation documented to allocate items such as mortgage/rent, insurance, utilities or other general administration. o Personnel costs and related fringe benefits appeared to be remaining amounts not already reimbursed by other grants/programs rather than based on time spent specific to coronavirus. o Supplies submitted were not clearly identifiable as necessary to prevent, prepare for and respond to coronavirus. Condition Upon notification of the above compliance issues, management provided an updated detail of expenses incurred in the period of availability (January 1, 2020 through June 30, 2023) indicating a total of $1,405,474 spent on qualified expenditures during period 5. This detail included a cost allocation based on square footage dedicated to coronavirus areas of each facility to determine cost allocation of the administration/overhead amounts. The new population was sampled and we determined the following items to be ineligible: • We determined that costs from April 2020 through April 2021 of $283,525 should be excluded as they appeared to have been submitted as support for Period 1. • We determined that equipment of $51,794 was excluded as it was found to have been reimbursed by another funding source. • We excluded $407,277 in personnel and fringe benefits as they were not clearly identifiable as related to the prevention of or preparation for coronavirus. Most of the Corporations personnel costs are covered by the Health Center Program. Questioned Costs: Total costs of $1,461,109 submitted to HRSA could not be substantiated in the period of availability. Management subsequently identified and documented $662,878 of expenses as qualifying expenditures that have not been submitted to HRSA. Context The Corporation received $1,461,109 in federal Provider Relief Funds in period 5. The federal funds are considered available for expenses incurred between January 1, 2020 through June 30, 2023 with reports indicating how it was spent due to HRSA by September 30, 2023. The report does not include an option to amend or correct so it is important to ensure the initial report is accurate. Cause Management did not have a clear understanding of the requirements for use of Provider Relief Funds. In addition, expenditures were not tracked timely that were directly related to the preparation for and prevention of coronavirus. Effect Lack of effective understanding of grant and program requirements resulted in unintentional errors that may not be detected in a timely manner by employees in the normal course of performing their assigned duties and result in lost funding or return of grant funds. Recommendation Management should initiate conversation with a HRSA representative immediately to implement a corrective action plan including having the updated list of eligible expenditures and support readily available for audit by the oversight agency. Management’s Response Management agrees with the finding.

Corrective Action Plan

2023-005 Inaccurate Tracking and Reporting of Federal Expenditures COVID-19 Provider Relief Fund – CFDA #93.498 Condition: During the compliance testing of the Uniform Guidance “Allowable Costs/Cost Principles” and “Reporting” requirements, the following exceptions were noted regarding the initial report of expenditures reported to HRSA for period 5: • There were no expenditures between January 1, 2020 and June 30, 2022. • The report to HRSA indicated that $1,461,109 was spent during the fiscal year 2023 however only $558,598 was allocated to Provider Relief Funds on the Corporations general ledger. • The amounts indicated on the report to HRSA as being qualified expenditures did not appear to have been based on specific needs to prevent, prepare for and respond to coronavirus: o There was not a clear cost allocation documented to allocate items such as mortgage/rent, insurance, utilities or other general administration. o Personnel costs and related fringe benefits appeared to be remaining amounts not already reimbursed by other grants/programs rather than based on time spent specific to coronavirus. o Supplies submitted were not clearly identifiable as necessary to prevent, prepare for and respond to coronavirus. Upon notification of the above compliance issues, management provided an updated detail of expenses incurred in the period of availability (January 1, 2020 through June 30, 2023) indicating a total of $1,405,474 spent on qualified expenditures during period 5. This detail included a cost allocation based on square footage dedicated to coronavirus areas of each facility to determine cost allocation of the administration/overhead amounts. Items reported in the new population were found ineligible as follows: • Costs from April 2020 through April 2021 of $283,525 appeared to have been previously submitted as support for Period 1. • Equipment purchased for $51,794 was found to have been reimbursed by another funding source. • $407,277 in personnel and fringe benefits were not clearly identifiable as related to the prevention of or preparation for coronavirus. Action Taken: • CHESI has compiled the updated list of eligible expenditures and related support and will immediately initiate correspondence with a HRSA representative to implement a corrective action plan. Anticipated Date of Completion and Name of Contact Person: March 31, 2025 – J.P. Champion, Chief Financial Officer

Categories

Questioned Costs Allowable Costs / Cost Principles

Other Findings in this Audit

  • 520700 2023-004
    Material Weakness Repeat
  • 520702 2023-003
    Material Weakness
  • 520703 2023-004
    Material Weakness Repeat
  • 1097142 2023-004
    Material Weakness Repeat
  • 1097143 2023-005
    Material Weakness
  • 1097144 2023-003
    Material Weakness
  • 1097145 2023-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $4.11M
93.224 Community Health Centers $1.66M
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $1.46M
93.332 Cooperative Agreement to Support Navigators in Federally-Facilitated Exchanges $112,545
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $102,619
93.268 Immunization Cooperative Agreements $72,121
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $55,486
93.994 Maternal and Child Health Services Block Grant to the States $40,897
93.959 Block Grants for Prevention and Treatment of Substance Abuse $35,247
93.217 Family Planning Services $30,735