Finding Text
Finding 2022-001 - Significant Deficiency in Internal Control ? Reporting Repeat Finding 2021-001 Assistance Listing No.: 93.498 COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not applicable Award Number: Not applicable Award Year: 2021 Compliance Requirement: Reporting Questioned Costs: None reported Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition/Context: In the Corporation's Period 2 submissions, using the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3), the lost revenues for quarter 4 of 2020 were incorrectly reported as $0 (rather than $4,934,624) and the lost revenues for quarter 1 of 2021 were incorrectly reported as $4,934,624 (rather than $0). This is not a statistically valid sample. Effect: Lost revenue reported to Health Resources and Services Administration (HRSA) for quarter 1 of 2021 should have been input as lost revenue for quarter 4 of 2020. Total lost revenues reported for Period 1 were not impacted by the amounts being incorrectly input into the wrong quarter because both quarters are within Reporting Period 2. Cause: An oversight by management during the review process that failed to identify the error in the reporting of lost revenues. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding and has implemented additional internal controls through independent review and sign off of the draft PRF reporting, prior to final submission, to ensure completeness and accuracy. The Corporation rectified the reporting error in its Period 3 submissions.