Finding Text
Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund; Noncompliance Finding/Material Weakness; Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Compliance Requirements. Criteria: The Provider Relief Fund (PRF) was established under the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. No. 116‐136, 134 Stat. 563) and the Coronavirus Relief and Response Supplemental Appropriations Act (Pub. L. No. 116‐260). The PRFs are to be used to prevent, prepare for, and respond to coronavirus. The PRFs are to reimburse recipients only for health care related expenses or lost revenues that are attributable to coronavirus. PRF funds received during Period 1, April 10, 2020 through June 30, 2020, have a period of availability of January 1, 2020 through June 30, 2021. For purchases of tangible items made using PRF payments, the purchase does not need to be in the provider's possession (i.e., back ordered PPE, ambulance, etc.) to be considered an eligible expense but the costs must be incurred by the end of the period of availability. Providers must follow their basis of accounting (e.g., cash, accrual, or modified accrual) to determine expenses. Recipients who received one or more payments exceeding
$10,000 are required to report in each applicable reporting period. Condition: The Authority did not meet the requirement that the PRFs be used for expenditures within the period of availability. The Authority included $340,950 in expenditures that were outside the period of availability. Cause: The Authority used budgeted amounts for equipment and minor equipment for identifying expenditures on the Excel tracking spreadsheet that was used to complete the Period 1 reporting submission. The listing was not reviewed prior to submission to determine if the equipment and/or minor equipment was purchased and to update the cost of the items purchased. Effect: Overstatement of PRF expenditures reported on Period 1. Questioned costs: $340,950. Perspective Information: In the sample of 60 and 1 individually significant, the individually significant item
tested totaling $250,469, was noted to have never been purchased by the Authority. The Authority’s
tracking spreadsheet had a separate listing for equipment and minor equipment purchases. Based on the
error noted, we reviewed the complete listing and identified additional items that were not purchased or in
which the cost was overstated from the actual invoice amount. No extrapolation was deemed necessary. Repeat Finding: N/A Recommendations: We recommend policies and procedures over PRF reporting be strengthened to ensure expenditures are for amounts that were purchased within the period of availability and accurately report the expenditure amount. Views of Responsible Officials: In the future, the Authority will only use actual amounts for items that have been purchased. In addition, amounts will be reviewed against the funding guidance to make sure they are within the period of availability.