Finding Text
2022-001 United States Department of Health and Human Services Federal Assistance Listing/CFDA Number 93.498; Reporting Period 2 (TIN# 74-1684198) COVID-19 Provider Relief Fund and American Rescue Plan Rural Distributions (PRF) Activities Allowed/Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Reporting Period 2 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. Condition: The Reporting Period 2 PRF Report was not properly reviewed prior to submission, resulting in a reporting error related to lost revenues. Cause: The Center did not have adequate internal control to ensure review and approval of PRF reporting. Effect: There were lost revenues claimed in the Period 2 report that were incorrect due to not including year-end audit adjustments in the calculation. Without adequate review and approval, there is the possibility that ineligible expenses or lost revenues may be claimed under the program and the report may not be accurately completed. Questioned Costs: None. While lost revenues were overstated by $298,800, the Center had adequate lost revenue and expenses after the adjustment to substantiate the amounts received in Period 2. Context/Sampling: All key line items related to lost revenue subject to testing on the Period 2 report were tested. There were errors in 3 of the line items, reducing total lost revenue from $3,834,361 to $3,535,561. Corrected lost revenue exceeded the total PRF amounts received. Repeat Finding from Prior Year(s) No Recommendation: The Center should implement adequate tighter controls over reporting. We recommend the Center review all federal reporting to ensure accuracy and verifies that all year-end adjustments are included in reporting. We also recommend that the lost revenue reported is corrected in subsequent reporting. Views of Responsible Officials: Management agrees with the finding. Refer to Corrective Action Plan.