Finding Text
Finding 2022-004: Internal control deficiency and noncompliance over the calculation of lost revenues attributable to coronavirus. Identification of the federal program: Assistance Listing Number 93.498: ? COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution ? U.S. Department of Health and Human Services ? Federal award identification number ? Not Applicable ? Federal award year ? Period 2: January 1, 2020 to December 31, 2021 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A Chapter II Part 200 Subpart D 200.303 Internal controls, states: 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 terms and conditions of the award requires the following: ? The recipient certifies that the payment 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. ? The recipient certifies that it will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. ? The recipient shall submit reports as the secretary determines are needed to ensure compliance with conditions that are imposed on this payment, and such reports shall be in such form, with such content, as specified by the secretary in future program instructions directed to all recipients. Condition: During our testing over reporting, we observed management did not have effective internal controls in place to ensure lost revenues reported in the HRSA PRF Reporting Portal were calculated correctly. This resulted in an understatement of lost revenues reported in the HRSA PRF Reporting Portal. Cause: Management did not have effective internal controls in place to ensure the reported lost revenues attributable to coronavirus reported in the HRSA PRF Reporting Portal were free from error. Effect or potential effect: The calculation of lost revenues attributable to coronavirus was reported incorrectly in the HRSA PRF Reporting Portal. Questioned costs: None. Context: During our testing over reporting, we obtained a listing of 2 PRF reports submitted to the HRSA PRF Reporting Portal and selected both reports for testing. We observed the calculation of lost revenues attributable to coronavirus utilized by management to report lost revenues in the HRSA PRF Reporting Portal did not have supporting documentation. Management prepared an updated calculation using the same methodology which resulted in total lost revenues of $18,706,671 compared to total lost revenues reported in the HRSA PRF Reporting Portal of $14,683,441 resulting in an increase of lost revenues of $4,023,230. Management?s control regarding the review of the PRF reports did not identify this understatement when submitting the Period 2 report into the HRSA PRF Reporting Portal. The understatement did not result in the entity having excess expenses and lost revenues to substantiate the payments received. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting in the HRSA PRF Reporting Portal. This will ensure the lost revenues reported in the HRSA PRF Reporting Portal is reported correctly. Views of responsible officials: Since the start of the Covid-19 pandemic, Ochsner LSU Health has coordinated efforts across multiple divisions throughout the organization to ensure compliance with the Provider Relief Fund that included leveraging publicly available information, outside consultants, and an internal review prior to management sign off. Ochsner LSU Health will ensure that all calculations are documented with detail supporting information. An additional quality control measure will be implemented whereby Ochsner?s Internal Audit Department will perform a detailed review of the calculation including tracing all formulas to ensure accuracy prior to management sign-off. In addition, Ochsner LSU Health will work with HRSA to understand the most appropriate manner to correct this issue within the Provider Relief Fund in the subsequent portal submissions.