Finding Text
Finding 2021-002 – Reporting – Material Weakness in Internal Control Over Compliance and
Instance of Material Noncompliance. See finding 2021-002 for the included table. Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that the non-federal entity must
establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes,
regulations, and terms and conditions of the federal award.
Condition/Context: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Program (Provider Relief Fund), providers are required to submit reporting to the Health Resources
Services Administration (HRSA) that describes the uses of the funds and how the provider complied with
the terms and conditions of the program. The Organization received general and targeted funds for six
different entities within the Organization.
Repeat Findings from Prior Year(s): This is not a repeat finding.
Cause and Effect: In addition to the challenges encountered while operating a health system during the
Coronavirus (COVID-19) pandemic, leading up to the audit period, the Organization was significantly
impacted by bankruptcy, turnover of leadership, and the lack of team members that had expertise with
grant management and accounting. Those factors coupled with the evolving nature of PRF guidance led
to incorrect reporting.
The most significant effects noted were:
- Lost revenues reported for Period 1 and Period 2 improperly included 2019 revenues from Astria
Regional Medical Center, which closed due to reasons unrelated to the COVID-19 pandemic.
This overstated lost revenues by approximately $140 million. However, as that issue related to a
general distribution, it was determined Period 1 general distributions of $5,124,268 to Astria
Health and Subsidiaries could be allocated to another entity within the Organization. Astria
Sunnyside Hospital had unreimbursed lost revenue in excess of the Period 1 general
distributions. As a result, while there are reporting issues as outlined in this finding, there are no
related questioned costs arising from this matter.
- Expenditures reported by the Organization were not supported by detailed schedules prior to the
commencement of the single audit. After the start of related audit, management compiled and
provided a detailed listing of expenditures that exceeded the $10,337,509 reported as
expenditures for testing.
- The Organization did not have proper controls in place to ensure the reports are prepared and
reviewed by separate individuals and that evidence of review was documented and retained.- The Organization did not have proper document retention controls in place to support timely
submission of three of five reports filed with HRSA.
Questioned costs: None to be reported.
Recommendation: We recommend management implement policies and procedures to ensure required
reports for grants are prepared and reviewed by separate individuals with evidence of review documented
and that financial reports are submitted timely with underlying support properly documented.
Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The
Organization will review and modify policies and procedures over Federal Grant Awards to ensure
management implements policies and procedures to ensure there is understanding of the terms and
conditions of Federal awards and that reports are prepared and reviewed by separate individuals with
evidence of review documented.