Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) Federal Award Identification Number and Year - N/A, 2022 Pass-through Entity - N/A - Direct funded Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per the Provider Relief Fund Distributions and American Rescue Plan Rural Distribution Post-Payment Notice of Reporting Requirements dated October 27, 2022, allowable expenses paid with general and targeted PRF distributions may be reported as a use of PRF funds. Allowable expenses must be determined using the PRF recipient's basis of accounting. Condition - Covenant HealthCare's controls in place for reporting submissions did not identify that guidelines were not followed related to the reporting of expenses. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A - Refer to context below for additional information. Context - The reporting submission for health care expenses did not follow the guidelines published by the U.S. Department of Health and Human Services (HHS). Covenant HealthCare included approximately $1,450,000 of expenses within the PRF portal that were not calculated in accordance with the post-payment notice of reporting and the HRSA PRF Reporting Portal User Guide. Because Covenant HealthCare had additional health care expenses and lost revenue that could have been used instead of these expenses, Covenant HealthCare still would have qualified to recognize all PRF payments received in Period 2. Cause and Effect - Appropriate review of the expenses reported was not completed to ensure that the expenses were properly reported. As a result, the report submitted was inaccurate, but the schedule of expenditure of federal awards was not impacted. Recommendation - We recommend Covenant HealthCare implement controls, including levels of review, to ensure reports are completed and submitted in accordance with the guidelines established by HHS. Views of Responsible Officials and Planned Corrective Actions - Covenant Healthcare accepts the finding and will implement additional layers of review regarding expense submission to ensure that the reports are submitted within the established guidelines. As stated above, the lost revenue from the COVID-19 pandemic more than offsets this finding and there are no resulting PRF recognition issues.