Finding 613198 (2022-002)

Significant Deficiency
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2023-05-30
Audit: 34216
Organization: Vetter Senior Living (NE)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Employee benefits were misclassified as contract labor costs, violating the terms of the Provider Relief Fund.
  • Impacted Requirements: Funds must only cover eligible healthcare expenses related to COVID-19, as outlined in the CARES Act and HRSA guidance.
  • Recommended Follow-Up: Management should strengthen internal controls to ensure only eligible costs are reported in the PRF portal.

Finding Text

Federal Program: CFDA #93.498 US Department of Health and Human Services Provider Relief Fund and American Rescue Plan (ARP) Distribution Criteria: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that general funds are to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. Funds received for infection control were more restrictive in nature and could only be used for testing and reporting costs, additional patient care personnel, or expense incurred to improve infection control. Condition: During the process of testing claimed pandemic related healthcare expenses, it was noted that employee benefits were incorrectly assigned to contract labor. Cause: Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management had a formula error in its employee benefit calculation. Effect: Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Management also reported unreimbursed expenses within the PRF reporting portal which were used to replace the amount of employee benefits assigned to contract labor. Questioned Costs: None. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in amounts expended. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding summarized above.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 36756 2022-002
    Significant Deficiency
  • 36757 2022-003
    Significant Deficiency
  • 613199 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $14.13M