Finding 586913 (2023-001)

2023-001 Application of COVID-19 Related Expenses U.S. Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498) Criteria: Provider Relief Fund (PRF) payments may be applied to eligible COVID-19 related expenses dating back to January 1, 2020, and up to the end of the period of availability based on the date of receipt of funds as prescribed by the U.S. Department of Health and Human Services, so long as they are to prevent, prepare for and respond to coronavirus. Condition: In the internal tracking of eligible COVID-19 related expenses applied to the Period 4 PRF receipts for Rogers Behavioral Health System, Inc. and Subsidiaries (the Health System), the Health System calculated invoice amounts related to legal services incurred as part of the Health System’s response to COVID-19 in a manner that increased legal expenses applied to PRF funds by the percent discount given by legal counsel rather than decreasing legal expenses applies to PRF funds. Calculating the identified eligible legal expenses in this manner occurred for legal expenses incurred and applied to PRF funds from August 2021 to February 2022. Additionally, for one month, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses. Cause: The Health System did not have adequate internal controls in place over the identification and calculation of eligible COVID-19 related expenses applied to PRF funds received. Effect: The Health System applied amounts to PRF funds received for Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. Questioned Costs: $49,559 Context: For 14 of 19 legal expenses selected, the Health System applied amounts to PRF funds received in Period 4 in excess of actual costs incurred related to legal services as part of the Health System’s response to COVID-19. This application error, which totaled $34,353, was made on all legal expenses identified as eligible expenses for application to PRF funds received for the period from August 2021 to February 2022. Additionally, for the invoice for the month of July 2021, the Health System included the eligible expenses twice in the internal tracking of eligible COVID-19 related expenses, resulting in duplicate applied costs of $15,206. Repeat finding: No Recommendation: We recommend management strengthen internal controls over the accuracy of the internal tracking and calculation of eligible COVID-19 related expenses. Views of responsible officials: Management agrees with the finding and recommendation.