Finding 559917 (2022-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2025-05-08

AI Summary

  • Core Issue: The Authority inaccurately reported lost revenue by excluding certain revenue sources, violating federal reporting criteria.
  • Impacted Requirements: Reports for Period 2 and 3 must be based on accurate financial data as per 45 CFR 75.342.
  • Recommended Follow-Up: Update policies and procedures for federal grant reporting to ensure complete and accurate information is used in future submissions.

Finding Text

COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342). The Authority is required to prepare and submit Period 2 and 3 provider relief fund reports to the U.S. Department of Health and Human Services. These reports are to be prepared using accurate financial information and submitted by the deadline established. Condition: The Authority excluded revenue from multiple sources that it did not own for the entire period of availability in the lost revenue calculation to create a more accurate comparison, which is not allowed under option 1. Questioned Costs: None. Context: The Period 2 and 3 provider relief funding was tested. The Authority selected option 1 to report lost revenues based on quarterly actual amounts. Errors in the calculation of patient service revenue for the quarters reported were identified. Effect: Errors were made in reporting quarterly total revenue/net charges for patient care for each year, 2019, 2020, and 2021. Lost revenue was not accurately reported under option 1. However, the Authority utilized allowable costs for Period 2 and 3 funding received, so that no lost revenues were utilized as a basis for the funding received, and as such, there are no questioned costs. Cause: The Authority did not follow the criteria of option 1 when calculating patient service revenue. Identification as a repeat finding, if applicable: Repeat finding. See finding 2021-001. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions: See attached corrective action plan for the Authority’s response to the finding.

Corrective Action Plan

We are in receipt of the finding required to be reported by Uniform Guidance, regarding other instances of noncompliance with respect to Reporting. Management agrees with the findings. Policies and procedures over federal grant reporting will be modified to ensure reports are prepared using complete and accurate information. We will increase compensating controls by introducing additional oversight and review for future Provider Relief Fund reporting. Terri Contreras, CFO, will be responsible for ensuring the corrective action plan is followed. The Authority had enough allowable expenditures for Period 2 and Period 3 funding received so that no lost revenues were utilized as a basis for the funding received. The corrective action plan was implemented in March 2023 with the submission of Period 4 reporting.

Categories

Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 1136359 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $9.37M
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $1.71M
93.301 Small Rural Hospital Improvement Grant Program $255,561
93.697 Covid-19 Testing for Rural Health Clinics $200,000
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $49,529