Finding 525090 (2023-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2025-02-28
Audit: 344374
Organization: Confluence Health (WA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Confluence Health failed to use an approved budget for the entire period of availability when calculating lost revenue for federal awards.
  • Impacted Requirements: Internal controls over compliance with federal statutes and regulations were not effectively maintained, leading to incorrect reporting to HHS.
  • Recommended Follow-Up: Management should review award requirements and reporting processes to ensure compliance with program terms and conditions.

Finding Text

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 5 TIN# 910171250 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Confluence Health must establish and maintain effective internal control over federal awards that provides reasonable assurance that Confluence Health is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: Confluence Health selected option ii to calculate lost revenue which consists of a comparison of actual results during the period of availability to a budget approved before March 27, 2020, for the entire period of availability. The budget used in the calculation of lost revenue for quarters in 2021, 2022 and 2023 was not approved prior to March 27, 2020. Cause: Confluence Health did have an approved budget prior to March 27, 2020, for calendar year 2020, but the approved budget did not cover the entire period of availability. Effect: The reporting to HHS for Period 5 was considered incorrect. Confluence Health did not have a budget approved prior to March 27, 2020 for the entire period of availability. There was no effect on the amount of lost revenue applied against the funding received, however there were errors in the key line items reported. Questioned Costs: None reported. Context: Key line items were tested on the Period 5 Department of Health and Human Services special report. Repeat Finding from Prior Years: Yes. Recommendation: We recommend that management review award requirements and reporting to ensure proper application of the terms and conditions of the program. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 5 TIN# 910171250 Finding Summary: Confluence Health selected option ii to calculate lost revenue which consists of a comparison of actual results during the period of availability to a budget approved before March 27, 2020, for the entire period of availability. The budget used in the calculation of lost revenue for quarters in 2021, 2022 and 2023 was not approved prior to March 27, 2020. Corrective Action Plan: Confluence Health during the next pandemic will issue a budget for the entire period required by the grant. Confluence developed a Grant Committee to oversee the reporting guidelines before approving grants. This will make the information for reporting requirements clearer to the organization and Financial Reporting Department. Responsible Individual: Eric Caldwell, VP of Finance is responsible for this corrective action plan that was put into place after the audit.

Categories

Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 525091 2023-004
    Material Weakness Repeat
  • 525092 2023-005
    Material Weakness
  • 1101532 2023-003
    Material Weakness Repeat
  • 1101533 2023-004
    Material Weakness Repeat
  • 1101534 2023-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $11.36M
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $579,788
14.241 Housing Opportunities for Persons with Aids $27,094