Finding 586552 (2021-004)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2021
Accepted
2024-01-25

AI Summary

  • Core Issue: There was a material weakness in internal controls over compliance, leading to discrepancies in the lost revenue calculation reported to the Department of Health and Human Services.
  • Impacted Requirements: The organization failed to maintain effective internal controls as required by 2 CFR 200.303(a), resulting in an incorrect claim for lost revenue.
  • Recommended Follow-Up: Management should review and enhance processes for monitoring and reporting lost revenue calculations to ensure accuracy in future submissions.

Finding Text

2021-004 Department of Health and Human Services CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 TIN #381649577 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s final lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program did not agree to the amount claimed in the report submitted to the Department of Health and Human Services for Period 1. Cause: The Organization recalculated lost revenue and noted multiple adjustments to the amount that could be claimed. Effect: The difference in what was accurately calculated compared to what was reported led to an incorrect filing and a claim of more support for lost revenue than was needed. Questioned Costs: None reported. Context: Lost revenue claimed in the report to the Department of Health and Human Services totaled $3,161,203. After corrections were made to the lost revenue support calculation, lost revenues should have been $3,278,318 for a difference of $117,115. Repeat Finding from Prior Years: No Recommendation: We recommend that management reviewed their process and procedures to include monitoring over amounts reported relating to lost revenue amounts and the related calculation. Views of Responsible Officials: Management agrees with the finding.

Categories

Subrecipient Monitoring Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 10109 2021-003
    Material Weakness
  • 10110 2021-004
    Material Weakness
  • 10111 2021-005
    Material Weakness
  • 586551 2021-003
    Material Weakness
  • 586553 2021-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund $4.41M
93.697 Covid-19 Testing for Rural Health Clinics $433,942
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $77,349
93.301 Small Rural Hospital Improvement Grant Program $67,500
93.889 National Bioterrorism Hospital Preparedness Program $7,000