FAC Explorer

Finding 538045 (2020-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2020
Accepted
2025-03-27
Audit: 349073
Organization: Confluence Health (WA)
Auditor: Moss Adams

AI Summary

  • Core Issue: The Health System lacked adequate controls to ensure the Schedule of Expenditures of Federal Awards (SEFA) accurately included all qualifying expenditures.
  • Impacted Requirements: Compliance with the Uniform Guidance (2 CFR 200) for reporting federal awards was not met, leading to a revision of the SEFA to include an additional $1,019,828.
  • Recommended Follow-Up: Implement a year-round review process to ensure all federal grant expenditures are identified and reported correctly on the SEFA.

Finding Text

Finding 2020-001 Preparation of the Schedule Expenditures of Federal Awards – Material Weakness in Internal Control Over Compliance Program: U.S. Department of Health and Human Services HRSA COVID-19 Uninsured Program ALN 93.461 Award year: 2020 Criteria: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, Confluence Health (the Health System) is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Cause: The Health System did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The SEFA was revised to include $1,019,828 of expenditures related to ALN #93.461, HRSA COVID-19 Uninsured Program, which resulted in an additional major program and the reissuance of the 2020 reporting package. Questioned Costs: Not applicable. Context: Factors contributing to the condition included the high volume of activity related to new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures from a Federal source that were required to be reported on the SEFA. Repeat Finding: Not applicable. Recommendation: We recommend the Health System develop and implement a review process through the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, reconcile to support, and perform a related review prior to audit. This will allow all grants from a Federal source to be identified and tracked, ensuring completeness.

Corrective Action Plan

From: Eric Caldwell, Vice President, Finance Subject: Single Audit Corrective Action Plans for Year Ended December 31, 2022 Date: March 3, 2025 Prior Year Findings and Corrective Actions: Finding 2020-001 Preparation of the Schedule Expenditures of Federal Awards – Material Weakness in Internal Control Over Compliance Finding Summary: The Health System did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The SEFA was revised to include $1,019,828 of expenditures related to ALN #93.461, HRSA COVID-19 Uninsured Program, which resulted in an additional major program and the reissuance of the 2020 reporting package. Corrective Action Plan: Confluence Health has made significant changes to its internal controls to ensure federal funds are accounted for properly in the Schedule of Expenditures of Federal Awards. Confluence Health developed a Grants Committee that approves all Federal and State Grants. This Committee reviews all grant applications and after approval, contacts finance and executive leaders of the approved grants by the committee.In addition to the control implemented above, Confluence Health meets internally monthly with all parts of the organization that receive cash payments from grant programs and incur federal expenditures to confirm if federal grant funds have or have not been received and spent. Our Revenue Cycle department that received the funds related to this program has provided education to their team, and leadership is aware of the risk and importance of reporting federal funding of grants and monitoring compliance. The COVID-19 HRSA Uninsured Program has been reported appropriately on Confluence Health’s restated 2020 Schedule of Expenditures of Federal Awards. Responsible Individual: This process has been put in place and continues monthly during our month-end close meetings to ensure federal grant funds are being reported correctly. The Vice President of Finance, Eric Caldwell, is responsible for this corrective action that has been put into operation as of 1/1/2025.

Categories

Reporting

Other Findings in this Audit

  • 1114487 2020-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $1.02M
21.019 Covid - 19 Coronavirus Relief Fund $982,175
93.800 Organized Approaches to Increase Colorectal Cancer Screening $380,749
93.U01 Hiv Case Management $285,665
14.241 Housing Opportunities for Persons with Aids $51,727
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $30,783