Finding Text
Federal Assistance Listing No. 93.498
U.S. Department of Health and Human Services
COVID-19- Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Criteria or Specific Requirement – Reporting (45 CFR 75.342) and Activities Allowed/Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622, Pub. L. No. 116-260, Pub. L. No. 117-2)
Condition – Within the Provider Relief Fund Reporting Portal for Period 1, the Organization reported other Provider Relief Fund (PRF) expenses and lost revenues calculated using option i. The Organization did not maintain
adequate documentation to support some other PRF expenses were attributable to coronavirus, incurred following the accrual basis of accounting during the period of availability, and/or not eligible to be reimbursed by other sources. The Organization also did not calculate lost revenues following the accrual basis of accounting and other guidance issued by HHS.
Questioned costs – $1,566,926; Calculated as total expense charged to PRF for Period 1.
Context – The Period 1 PRF report was tested. The Organization allocated salaries and employee benefits to PRF for time associated with COVID-19 prevention activities; however, these salaries and benefits were not supported as incremental and necessary costs for the prevention, preparation and response to COVID-19 and a portion of these salaries and benefits were also reimbursed by other sources. The Organization calculated lost revenues of $668,478 based on patient service revenue information from the practice management system rather than lost revenues of $946,314 based on accrual basis financial records.
Effect –Based on the Period 1 PRF report filed, the Organization utilized PRF payments received on expenses and lost revenues that were not attributable to coronavirus, were reimbursed by other sources, and/or were not allowable in accordance with other guidance issued by HHS.
Cause – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution is a new program with complex and evolving regulations and compliance requirements. Internal controls were not in place to ensure the Organization correctly applied the guidance.
Identification as a repeat finding – Not a repeat finding.
Recommendation – Policies and procedures over allowable activities and federal grant reporting should be modified to ensure expenditures charged to grants are for activities allowed and federal grant reports are prepared using complete and accurate information.