Finding 584024 (2023-002)

Finding No: 2023-002 Reporting Federal Agency: U.S. Department of Health and Human Services Pass-Through Entities: N/A Assistance Listing Number: 93.498 Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: January 1 to March 31, 2023 (Period 4) and July 1 to September 30, 2023 (Period 5) Criteria or Requirement Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found, Including Perspective The review of lost revenue and related personnel expenses was not at a sufficient level of detail to demonstrate the supporting expenditures agreed to the portal reports. Although management reviewed and reconciled the expenditures to the portal reports, it was not evident how the 2022 adjustments to lost revenue made by HRSA and identified during the 2022 single audit impacted the current year portal reporting. Only a portion of the adjustments were reflected in the Period 4 and Period 5 reporting and management was not tracking which HRSA adjustments had been made, what was left to be made, and to which entities the adjustments were related to. Possible Cause Management did not have a single owner of the portal reports reconciliation process whom could identify that the HRSA adjustments were not being tracked. Questioned Cost None Effect During the audit, the System updated the reconciliation to agree to the portal reports for lost revenue amounts that had been adjusted and determined the remaining portion of the 2022 adjustments that needed to be included in Period 6 reporting. Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year Not a repeat finding. Recommendation The System should strengthen controls over the management review process to ensure the amounts reported the HRSA portal are supported. View of Responsible Officials Management concurs with the finding. This did not result in an overstatement of qualifying expenditures and no repayment of funding was required. The reconciliation review process will be enhanced for funding that applies to multiple funding periods.