Finding 586669 (2023-005)

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 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance 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 did not retain evidence of the review and approval of the expenditure listing and lost revenue calculation by a separate individual outside of the preparer. In addition, The Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #421030129 did not have evidence that it was reviewed and approved by a separate individual outside of the preparer. Cause: The Hospital did not have an internal control process in place to ensure a secondary review and approval of the expenditure listing, lost revenue calculation, and report submitted to the Department of Health and Human Services for Period 4 was documented. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may be claimed under the program and the special report might not be accurately completed. Questioned Costs: None reported. Context: A nonstatistical sample of 41 expenditures were selected for testing, which accounted for $971,367 of $1,077,594 direct program expenditures. The entire lost revenue calculation was tested, and key line items were tested on the Period 4 HHS report. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Hospital implement a control process which includes a secondary review and approval of the expenditure listing and lost revenue calculation and a secondary review and approval of the required reports to be submitted to the federal agency be documented. Views of Responsible Officials: Management agrees with the finding.