FAC Explorer

Finding 606095 (2022-005)

Material Weakness
Requirement
ABH
Questioned Costs
-
Year
2022
Accepted
2023-03-08
Audit: 25088
Organization: Ascension Health Alliance D/b/a Ascension (MO)
Auditor: Ernst & Young

AI Summary

  • Core Issue: Inadequate internal controls led to unapproved time cards and insufficient documentation for expenses across Tennessee, Michigan, and Kansas.
  • Impacted Requirements: Non-compliance with Section 200.303 of the Uniform Guidance regarding internal control and documentation for federal awards.
  • Recommended Follow-Up: Strengthen review processes for time cards and expense approvals, and ensure proper documentation retention to meet federal guidelines.

Finding Text

Information of the federal program: Federal Grantor: United States Department of the Treasury Assistance Listing No.: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-Through Grantor: State of Tennessee Department of Health Ascension Ministry Market: Tennessee Pass-Through Award Number: 34352-93122, 34352-90022, 34352-69822 Pass-Through Award Period: 07/06/2021?Ongoing Pass-Through Grantor: Michigan Health & Hospital Association Ascension Ministry Market: Michigan Pass-Through Award Number: Not applicable Pass-Through Award Period: 12/01/2021?09/30/2023 Pass-Through Grantor: Kansas Department of Health & Environment Ascension Ministry Market: Kansas Pass-Through Award Number: Not applicable Pass-Through Award Period: 09/01/2021?02/28/2022 Criteria or specific requirement (including statutory, regulatory or other citation): 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).? The Uniform Guidance 2 CRF Subpart E section 200.403 states the following: ?Costs must meet the following general criteria in order to be allowable under Federal awards: (c) be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity; and (g) be adequately documented.? Condition: Tennessee and Michigan ? Time cards for employees that were submitted for substantiation of funding for the federal program were not consistently evidenced as reviewed and approved. Kansas ? Evidence of management?s review for allowability and period of performance of expenses to be submitted to the State of Kansas was not retained. Michigan ? To determine the cost for contract labor, the System used an average contract labor rate, which is not consistent with policies and procedures for the cost of contract labor for other activities of the entity. In addition, management?s calculation of the average contract labor rate did not take into consideration all the contractor labor agreements. Cause: Tennessee and Michigan ? Time cards were processed without manager approval. Kansas ? Management did not have a requirement to retain the supporting documentation evidencing the approval of expenses to be submitted to the state. Michigan ? The System did not have an internal control in place to review the appropriateness of the average contract labor rate used and to ensure that adequate documentation is retained. Effect or potential effect: The System may incur unallowable expenses or not be in compliance with the terms and conditions of the federal program, including relevant cost principles. Questioned costs: None. Context: Tennessee and Michigan ? For 2 (totaling $905) of 35 (totaling $19,844) (4.6%) payroll transactions sampled during the fiscal year, the employees? time cards did not have evidence of review and approval by the employees? manager. For Assistance Listing No. 21.027, total payroll costs for the Tennessee and Michigan locations were $16,317,658, representing 54% of total federal expenditures of $30,499,780 for the year ended June 30, 2022. Kansas ? For Assistance Listing No. 21.027, total payroll and benefits expenses for Kansas were $9,109,616, representing 30% of total federal expenditures of $30,499,780 for the year ended June 30, 2022. Michigan ? We sampled 40 expenses (totaling $27,337) that were submitted to the states under the federal program. For 4 expenses (totaling $4,115) out of 40 (10%) that related to the Michigan location, the documentation supporting the average rate used to apply to contract labor hours claimed was not maintained. Furthermore, the analysis, subsequently provided, used contract labor data from only one vendor, instead of the three contractors utilized by the Michigan location. In addition, the average rate is not a standard practice of the System to determine the cost of contract labor. Instead, the contract labor cost is determined by invoiced amounts in the normal course of business. For Assistance Listing No. 21.027, expenditures for contract labor for the Michigan location were $1,636,000, representing 5.4% of total federal expenditures of $30,499,780 for the year ended June 30, 2022. Tennessee, Michigan, and Kansas federal expenditures totaled $4,135,064, $16,800,000, and $9,240,916, respectively, representing 14%, 55%, and 30%, respectively, of total federal expenditures for Assistance Listing No. 21.027 of $30,499,780 for the year ended June 30, 2022. Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: Tennessee and Michigan ? The System should reinforce the importance of adhering to its internal controls over the review and approval of time cards. Kansas ? The System should formalize the review and approval process of program expenses by authorized individuals that would include retention of evidence of the review, including documentation of the elements of the review process validated by the reviewer. Michigan ? The System should implement internal controls over the review and approval of the average contract labor rate, including the retention of adequate documentation. Views of responsible officials: Ascension will reinforce internal controls over review and approval of time cards and retention of documentation evidencing the approval of expenses. The use of the average labor contract rate was a conservative approach as Ascension?s actual average labor rate was higher than the average $150 per hour expensed to the grant. Ascension will reevaluate the methodology and appropriateness of use of an average contractor labor rate for contract labor reimbursement.

Categories

Allowable Costs / Cost Principles Cash Management Period of Performance Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 29649 2022-004
    Significant Deficiency
  • 29650 2022-005
    Material Weakness
  • 29651 2022-003
    Significant Deficiency
  • 29652 2022-004
    Significant Deficiency
  • 29653 2022-005
    Material Weakness
  • 29654 2022-004
    Significant Deficiency
  • 29655 2022-005
    Material Weakness
  • 29656 2022-004
    Significant Deficiency
  • 29657 2022-005
    Material Weakness
  • 29658 2022-004
    Significant Deficiency
  • 29659 2022-005
    Material Weakness
  • 29660 2022-003
    Significant Deficiency
  • 29661 2022-004
    Significant Deficiency
  • 29662 2022-005
    Material Weakness
  • 29663 2022-003
    Significant Deficiency
  • 29664 2022-004
    Significant Deficiency
  • 29665 2022-005
    Material Weakness
  • 29666 2022-003
    Significant Deficiency
  • 29667 2022-004
    Significant Deficiency
  • 29668 2022-005
    Material Weakness
  • 29669 2022-003
    Significant Deficiency
  • 29670 2022-004
    Significant Deficiency
  • 29671 2022-005
    Material Weakness
  • 29672 2022-003
    Significant Deficiency
  • 29673 2022-004
    Significant Deficiency
  • 29674 2022-005
    Material Weakness
  • 29675 2022-004
    Significant Deficiency
  • 29676 2022-005
    Material Weakness
  • 29677 2022-003
    Significant Deficiency
  • 29678 2022-004
    Significant Deficiency
  • 29679 2022-005
    Material Weakness
  • 29680 2022-003
    Significant Deficiency
  • 29681 2022-004
    Significant Deficiency
  • 29682 2022-005
    Material Weakness
  • 29683 2022-004
    Significant Deficiency
  • 29684 2022-005
    Material Weakness
  • 29685 2022-004
    Significant Deficiency
  • 29686 2022-005
    Material Weakness
  • 29687 2022-004
    Significant Deficiency
  • 29688 2022-005
    Material Weakness
  • 29689 2022-003
    Significant Deficiency
  • 29690 2022-004
    Significant Deficiency
  • 29691 2022-005
    Material Weakness
  • 29692 2022-003
    Significant Deficiency
  • 29693 2022-004
    Significant Deficiency
  • 29694 2022-005
    Material Weakness
  • 29695 2022-003
    Significant Deficiency
  • 29696 2022-004
    Significant Deficiency
  • 29697 2022-005
    Material Weakness
  • 29698 2022-003
    Significant Deficiency
  • 29699 2022-004
    Significant Deficiency
  • 29700 2022-005
    Material Weakness
  • 29701 2022-003
    Significant Deficiency
  • 29702 2022-004
    Significant Deficiency
  • 29703 2022-005
    Material Weakness
  • 29704 2022-004
    Significant Deficiency
  • 29705 2022-005
    Material Weakness
  • 29706 2022-001
    Material Weakness Repeat
  • 29707 2022-002
    Significant Deficiency Repeat
  • 606091 2022-004
    Significant Deficiency
  • 606092 2022-005
    Material Weakness
  • 606093 2022-003
    Significant Deficiency
  • 606094 2022-004
    Significant Deficiency
  • 606096 2022-004
    Significant Deficiency
  • 606097 2022-005
    Material Weakness
  • 606098 2022-004
    Significant Deficiency
  • 606099 2022-005
    Material Weakness
  • 606100 2022-004
    Significant Deficiency
  • 606101 2022-005
    Material Weakness
  • 606102 2022-003
    Significant Deficiency
  • 606103 2022-004
    Significant Deficiency
  • 606104 2022-005
    Material Weakness
  • 606105 2022-003
    Significant Deficiency
  • 606106 2022-004
    Significant Deficiency
  • 606107 2022-005
    Material Weakness
  • 606108 2022-003
    Significant Deficiency
  • 606109 2022-004
    Significant Deficiency
  • 606110 2022-005
    Material Weakness
  • 606111 2022-003
    Significant Deficiency
  • 606112 2022-004
    Significant Deficiency
  • 606113 2022-005
    Material Weakness
  • 606114 2022-003
    Significant Deficiency
  • 606115 2022-004
    Significant Deficiency
  • 606116 2022-005
    Material Weakness
  • 606117 2022-004
    Significant Deficiency
  • 606118 2022-005
    Material Weakness
  • 606119 2022-003
    Significant Deficiency
  • 606120 2022-004
    Significant Deficiency
  • 606121 2022-005
    Material Weakness
  • 606122 2022-003
    Significant Deficiency
  • 606123 2022-004
    Significant Deficiency
  • 606124 2022-005
    Material Weakness
  • 606125 2022-004
    Significant Deficiency
  • 606126 2022-005
    Material Weakness
  • 606127 2022-004
    Significant Deficiency
  • 606128 2022-005
    Material Weakness
  • 606129 2022-004
    Significant Deficiency
  • 606130 2022-005
    Material Weakness
  • 606131 2022-003
    Significant Deficiency
  • 606132 2022-004
    Significant Deficiency
  • 606133 2022-005
    Material Weakness
  • 606134 2022-003
    Significant Deficiency
  • 606135 2022-004
    Significant Deficiency
  • 606136 2022-005
    Material Weakness
  • 606137 2022-003
    Significant Deficiency
  • 606138 2022-004
    Significant Deficiency
  • 606139 2022-005
    Material Weakness
  • 606140 2022-003
    Significant Deficiency
  • 606141 2022-004
    Significant Deficiency
  • 606142 2022-005
    Material Weakness
  • 606143 2022-003
    Significant Deficiency
  • 606144 2022-004
    Significant Deficiency
  • 606145 2022-005
    Material Weakness
  • 606146 2022-004
    Significant Deficiency
  • 606147 2022-005
    Material Weakness
  • 606148 2022-001
    Material Weakness Repeat
  • 606149 2022-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rual Distribution $687.51M
93.461 Covid-19 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $39.06M
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $7.52M
93.600 Head Start $1.30M
93.268 Covid-19 Immunization Cooperative Agreements $713,140
93.959 Block Grants for Prevention and Treatment of Substance Abuse $574,767
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $424,025
21.019 Covid-19 Coronavirus Relief Fund $404,980
93.697 Covid-19 Testing and Mitigation for Rural Health Clinics $383,133
93.399 Cancer Control $375,886
93.558 Temporary Assistance for Needy Families $374,505
93.788 Opioid Str $355,740
93.650 Accountable Health Communities $332,142
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $330,787
84.181 Special Education-Grants for Infants and Families $328,353
16.575 Crime Victim Assistance $281,799
93.155 Covid-19 Rural Health Research Centers $255,876
14.195 Section 8 Housing Assistance Payments Program $228,815
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $217,385
93.323 Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $215,941
93.575 Covid-19 Child Care and Development Block Grant $214,122
93.958 Block Grants for Community Mental Health Services $196,242
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $184,116
93.332 Cooperative Agreement to Support Navigators in Federally-Facilitated Exchanges $171,705
10.331 Covid-19 Food Insecurity Nutrition Incentive Grants Program $147,347
93.600 Covid-19 Head Start $134,317
14.241 Housing Opportunities for Persons with Aids $128,861
17.720 Disability Employment Policy Development $124,958
14.267 Continuum of Care Program $117,859
93.839 Blood Diseases and Resources Research $108,426
93.837 Cardiovascular Diseases Research $105,801
20.600 State and Community Highway Safety $105,332
93.301 Covid-19 Small Rural Hospital Improvement Grant Program $95,699
17.207 Employment Service/wagner-Peyser Funded Activities $88,008
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $79,613
93.917 Hiv Care Formula Grants $72,652
14.191 Multifamily Housing Service Coordinators $65,962
93.686 Ending the Hiv Epidemic: A Plan for America - Ryan White Hiv/aids Program Parts A and B $65,404
14.157 Supportive Housing for the Elderly $64,990
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $64,368
93.667 Social Services Block Grant $61,080
93.994 Maternal and Child Health Services Block Grant to the States $60,780
16.607 Bulletproof Vest Partnership Program $59,096
93.395 Cancer Treatment Research $56,432
93.889 Covid-19 National Bioterrorism Hospital Preparedness Program $42,050
16.585 Drug Court Discretionary Grant Program $36,710
93.914 Hiv Emergency Relief Project Grants $30,000
93.310 Trans-Nih Research Support $28,000
10.558 Child and Adult Care Food Program $27,818
93.247 Advanced Nursing Education Workforce Grant Program $23,129
93.273 Alcohol Research Programs $21,374
93.426 Improving the Health of Americans Through Prevention and Management of Diabetes and Heart Disease and Stroke $20,000
93.940 Hiv Prevention Activities Health Department Based $20,000
10.555 National School Lunch Program $19,343
93.110 Maternal and Child Health Federal Consolidated Programs $19,090
93.478 Preventing Maternal Deaths: Supporting Maternal Mortality Review Committees $15,150
93.080 Blood Disorder Program: Prevention, Surveillance, and Research $14,741
93.361 Nursing Research $14,507
93.301 Small Rural Hospital Improvement Grant Program $11,915
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $11,244
12.420 Military Medical Research and Development $10,817
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $9,992
16.034 Covid-19 Coronavirus Emergency Supplemental Funding Program $8,639
93.865 Child Health and Human Development Extramural Research $2,380
10.545 Covid-19 Farmers' Market Supplemental Nutrition Assistance Program Support Grants $1,818
93.669 Child Abuse and Neglect State Grants $1,200
93.556 Marylee Allen Promoting Safe and Stable Families Program $1,023
93.083 Prevention of Disease, Disability, and Death Through Immunization and Control of Respiratory and Related Diseases $617
93.855 Allergy and Infectious Diseases Research $162