Finding Text
Department of Health and Human Services
Federal Assistance Listing #93.498
COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 4 TIN #421030129
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 Hospital selected option II to calculate lost revenue, which consists of a comparison of actual
results during the period of availability to the approved budget. The Hospital did not have a budget for the
entire reporting period that was approved prior to March 27, 2020. For the periods that the client did not have
an approved budget, $0 was entered for net patient revenues even though there were patient revenues for this
period.
Cause: The Hospital did have an approved budget prior to March 27, 2020 for fiscal year 2020, but the approved
budget did not cover the entire period of availability.
Effect: The reporting to HHS for Period 4 was considered incorrect. The Hospital did not have a budget approved
prior to March 27, 2020 for the entire period of availability. The Medical Center reported $0 for quarter 3 and 4
of 2021 and quarters 1, 2, 3 and 4 of 2022.
Questioned Costs: None. The Hospital claimed expenses for all Provider Relief Fund and American Rescue Plan
(ARP) Rural Distribution amounts in Period 4, so did not use lost revenue to support any of these.
Context: Key line items were tested on the Period 4 HHS report.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Hospital implement procedures to ensure the lost revenue calculation
claimed meets the requirements of the federal program.
Views of Responsible Officials: Management agrees with the finding.