Finding 5733 (2023-001)

Total Unused Lost Revenues Reporting Federal program: U.S. Department of Health and Human Services – ALN 93.498, COVID-19—Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution. Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Specific criteria are established by the U.S. Department of Health and Human Services (HHS) with respect to allowable cost and reporting requirements for this program, including: - Funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. - Entities may elect to calculate and report lost revenue using one of three options. For entities electing to report lost revenues using Option i, quarterly actual patient care revenues are to be reported. Condition: In preparing the Reporting Period 4 and 5 General Distribution submission report to Health Resources & Services Administration (HRSA), the Corporation did not reduce the Unused Lost Revenues included within the ARP Distribution submission report from the Unused Lost Revenues in the General Distribution report in the Current Reporting Period. This resulted in the Total Unused Lost Revenues in the Reporting Period 4 and 5 General Distribution submission reports to be overstated by $723,754. Context: The Corporation reported Total Unused Lost Revenues in the Reporting Period 4 and 5 General Distribution submission reports of $42,297,586 and $42,276,693. Had the correct amounts of Total Unused Lost Revenues in the Reporting Period 4 and 5 General Distribution submission reports been reported, the Total Unused Lost Revenues would have been $723,754 less. The Total Unused Lost Revenues would still have exceeded PRF amounts received. Cause: In preparing the Reporting Period 4 and 5 General Distribution submission report to Health Resources & Services Administration (HRSA), the Corporation did not reduce the Unused Lost Revenues included within the ARP Distribution submission report from the Unused Lost Revenues in the General Distribution report in the Current Reporting Period. This resulted in the Total Unused Lost Revenues in the Reporting Period 4 and 5 General Distribution submission reports to be overstated by $723,754. Review processes were performed before the reports were submitted, but these reviews were not effective in detecting and correcting the errors before report submission. Effect: The Total Unused Lost Revenues in the Reporting Period 4 and 5 General Distribution submission reports were overstated by $723,754. Questioned costs: None Repeat finding: No Recommendation: We recommend that internal controls be strengthened related to review of the quarterly lost revenue calculations and reporting in the PRF reporting portal. We suggest these reviews include review of documentation supporting input included in the report. View of responsible officials of the auditee: Management agrees with the finding, has prepared an assessment of the root cause of this significant deficiency, and has developed a corrective action plan.