Finding Text
Information on Federal Programs U.S. Department of Health and Human Services: ALN No. 93.498, Provider Relief Fund; Award Year: Periods 2 and 3: July 1, 2020 to June 30, 2021 Specific Requirements/Criteria The terms and conditions for participation in the Provider Relief Fund (PRF) specifies that the relief payments provided will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Condition During our testing of the internal controls and compliance over the Activities Allowed and Unallowed process, we noted controls that were designed to ensure that coronavirus related expenses were actually incurred were ineffective in certain circumstances. To test the compliance of this process, we tested a total of 42 expense transactions to ensure the expense was incurred and attributable to coronavirus as per the terms and conditions. Of the 42 expense transactions tested, 2 related to depreciation expense. We noted that for these 2 transactions, they were duplicate capital items from previous PRF submissions and therefore were ineligible to be claimed for reimbursement. Depreciation related to these two transactions totaled $10,560. Total depreciation expense claimed for reimbursement for the year ending June 30, 2022 was $42,748. The sample was not intended to be, and was not, a statistically valid sample. Cause The above finding was caused by the control not being designed with sufficient precision to ensure a detail level of review was conducted to identify whether or not the depreciation expenses claimed for reimbursement were based on actual incurred eligible coronavirus expenses. Effect The schedule of expenditures of federal awards is inappropriately stated as of June 30, 2022 because ineligible costs were charged to the program. Questioned Costs $10,560 Repeat Finding from Prior Year Yes ? Finding 2021-001 Recommendation We recommend that the Association implement procedures and policies to ensure that the amounts being claimed for reimbursement are based on actual expenditures incurred and expenditures are not claimed for reimbursement more than once. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding and recommendation. Internal controls will be strengthened in future periods to ensure that ledger details for reimbursement requests will be filtered to exclude depreciation for costs already considered during the review of capital expenditures. The Director of Finance will review ledger details prior to submission to ensure only appropriate ledger accounts are included.