Finding Text
U.S. Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #810530457 and #810247969 Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Reporting Material Weakness 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. The Corporation claimed expenses based on specifically identified COVID related expenses and COVID related incremental expenses. The Corporation selected Option i and Option iii to calculate lost revenue (this varied based on specific entity). Condition ? During our testing, we noted reviews were performed over individual eligible expenditures; however, there was no formal review or approval of the expenditure spreadsheet used to calculate the expenditures claimed for the federal program outside of the preparer at the LH Cut Bank location. The Corporation?s calculation of lost revenue claimed under the federal program as an allowable cost was not subject to a formal review or approval by a separate individual outside of the preparer at the LH Cut Bank location. In addition, there was no evidence retained that the Corporation?s special report submitted to the Department of Health and Human Services for Period 1 was reviewed and approved by a separate individual outside of the preparer at the LH Whitefish and LH Cut Bank locations. Cause ? The Corporation did not have an adequate internal control policy in place to ensure review and approval over tracking of other funding sources, lost revenue, or reporting was documented at all locations. Effect - The lack of adequate policies governing review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs ? None reported.Context/Sampling - Detail testing was performed over eligible expenditures for activities allowed and unallowable and allowable cost/cost principles. A sample of 65 expenditures was tested which totaled $983,641 out of $22,638,825. The lost revenue for all applicable quarters was tested. Also, key line items of the special report submitted to the Department of Health and Human Services for Period 1 and 2 Reporting were tested. Repeat Findings from Prior Years ? No Recommendation - We recommend that the Corporation enhance internal control policies to ensure that formal documentation of reviews is present at for all supporting documentation and reports all locations. Views of Responsible Officials - Management agrees with the finding.