Finding Text
Finding 2022-001 ? Significant deficiency in documentation supporting Provider Relief Fund expenditures Identification of the federal program: Assistance Listing Number 93.498: ? COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution ? U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) ? Federal award identification number ? Not Applicable ? Federal award year ? Period 3: January 1, 2020 to June 30, 2022 Criteria or specific requirement: 2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: University of Vermont Medical Center, Inc. (UVMMC) submitted $9,889,191 in expenditures to the HRSA Provider Relief Fund (PRF) portal for reporting period 3. Management did not initially retain a listing of these expenditures at an appropriate sampling unit level until the Uniform Guidance audit commencement. Within this listing, certain expenditures for travelling nurses agreed to certified timecards and approved payrates, but management did not retain approval documentation of the reconciliation for these expenditures to vendor invoices. In addition, management did not retain adequate documentation of a change to its PRF reporting and expenditure submission strategy. Subsequent to submission of UVMMC?s HRSA reporting period 1 data, certain reported expenditures were obligated by an alternate federal funding source. For PRF purposes, management ?replaced? these newly unallowable expenditures with lost revenues for the applicable PRF period, in line with HRSA guidance (as described in HRSA?s frequently asked questions available on the HRSA website). HRSA guidance requires maintenance of appropriate documentation to support deductions of expenditures from prior reporting periods (as adjustments cannot be made retroactively within the HRSA portal). While this change in expenditure reimbursement approach was extensively discussed and approved by the appropriate level of UVMMC personnel, documentation of this change was not prepared or retained by management until audit commencement. Finally, management did not retain adequate approval documentation that expenditures for travelling nurses submitted to the HRSA PRF portal in reporting period 3 were not duplicated with expenditures reimbursed from other sources until audit commencement. Cause: Management represented that they performed a review and approval of PRF expenditures for allowability; however, supporting documentation to evidence that internal controls were sufficiently designed and operating effectively was not maintained. Effect or potential effect: A lack of internal controls over the review and approval of expenditures for allowability could result in unallowable expenses being charged to the PRF program. Questioned costs: None. Context: Total expenditures reported by UVMMC in the HRSA portal in reporting period 3 are $9,889,191. Total PRF lost revenue and expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) by UVMMC are $43,606,000 for the year ended September 30, 2022. Identification as a repeat finding, if applicable: No. Recommendation: Management should reassess its internal controls over the review and approval of allowability of PRF expenditures. Management should retain more robust documentation related to its review processes, including evidencing approval of the review of methodology and detail reports used to reconcile to amounts reported on the SEFA. Views of responsible individuals: Management agrees and has reassessed its internal controls over the review and approval of allowable expenditures under this program. Management has updated its documentation for this program reviewed under this audit and is in the process of updating other documentation related to HRSA reporting periods 4 and 5.