Finding Text
Statement of Condition: As part of our compliance testing, we reviewed certified submissions to the HHS portal for both Period 1 and Period 2. As a result of this review, we noted that certain expenses were claimed in Period 1 that management did not intend to claim, rather, they intended to utilize lost revenues reported in the submissions. Criteria: Cottages is required to submit Period 1 and Period 2 Provider Relief Fund (PRF) reports to the Department of Health and Human Services (HHS). The reports require providers to account for and certify that eligible expenses and lost revenue are used to determine proper usage and recognition of funds. Effect of Condition: While Cottages incurred more than sufficient eligible expenditures and lost revenues to exhibit that Cottages funds were fully utilized, the reporting of the Period 1 and Period 2 expenditures were incorrect, and management did not intend to claim certain expenditures through the PRF Funding. As a result, the Period 1 and Period 2 reporting does not tie to management’s underlying supporting documentation for the Period 1 and Period 2 PRF reports, since expenditures claimed were intended to be a lesser amount than reported. Cause of Condition: Cottages included certain eligible expenses in its Period 1 Provider Relief Fund reports due to evolving guidance and availability of funding streams at the time the reporting was due. Upon further guidance of the funding over the period of performance, lost revenue was intended to be utilized for use of most of the funding received, versus expenditures. Based on the guidance in existence and funds available at the time, management believed Cottages to be in compliance based on HHS Portal Instructions at the time of submission. Recommendation: We recommend Cottages maintain documentation that details they incurred enough eligible expenditures and lost revenues to continue to qualify for the full amount of the funding, even though expenditures and lost revenues claimed on the Period 1 and Period 2 report were not what they intended. Due to the untimely reporting of this finding, Cottages is past the timeframe for filing revisions to Period 1 and Period 2 PRF reports. Views of Responsible Official: We agree with the recommendation. Cottages incurred significant lost revenue and eligible expenditures exceeding the amount of the funds received. See corrective action plan.