Finding 616130 (2022-010)

Reporting Federal Department ? U.S. Department of Health and Human Services COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, Federal Assistance Listing # 93.498 County Department ? Cook County Health Finding 2022 ? 010 CRITERIA Per the U.S. Department of Health and Human Services, Health Resources and Service Administration (HRSA) User Guide on Provider Relief Fund (PRF) Reporting Portal - Reporting dated June 30, 2021 (User Guide), Post-Payment Reporting Requirements, Section 1.3, ?PRF recipients should review the most recently published Post-Payment Notice of Reporting Requirements available on the PRF Reporting Requirements & Auditing website for information about reporting requirements?. Per the June 11, 2021, Post-Payment Notice of Reporting Requirements, Provider Relief Fund General and Targeted Distribution (which superseded the notice released on January 15, 2021), ?The period of availability of funds applies to all past and future PRF payments made under the legal authorities outlined in the section Overview of Legal Requirements for Reporting. PRF recipients must only use payments for eligible expenses, including services rendered, and lost revenue during the period of availability.? In addition, the June 11 Notice of Reporting Requirements states ?Reporting Entities will report on their use of funds using their normal basis of accounting (e.g., cash basis, accrual basis). Recipients will report data in the following order: 1) Interest Earned on PRF Payment(s); 2 Other Assistance Received; 3) Use of SNF and Nursing Home Infection Control Distribution Payments (if applicable); 4) Use of General and Other Targeted Distribution Payments; 5) Net Unreimbursed Expenses Attributable to Coronavirus; 6) Lost Revenues Reimbursement and various other data elements, as required.? Step 9 of the User Guide ? Other Provider Relief Funds Expenses for Payments Received During Payment Period states the Reporting Entity is required to report on the use of all other PRF payments by indicating the calendar year quarterly expenses reimbursed with these payments. PRF payments must be used for expenses unreimbursed by other sources and that other sources are not obligated to reimburse. Reporting Entities that received $500,000 or more in aggregated PRF payments during each Payment Received Period are required to report on the use of these other PRF payments in greater detail than the two categories of General and Administrative (G&A) Expenses and Health Care-Related Expenses, according to the following sub-categories of expenses: 1) General and Administrative Expenses Attributable to Coronavirus: a) Mortgage/Rent; b) Insurance; c) Personnel; d) Fringe Benefits; e) Lease Payments; f) Utilities/Operations; g) Other General and Administrative Expenses. 2) Health Care-Related Expenses Attributable to Coronavirus: a) Supplies; b) Equipment; c) Information Technology; d) Facilities: e) Other Health Care-Related Expenses." Step 10 of the User Guide ? Unreimbursed Expenses Attributable to Coronavirus states HRSA expects that PRF payments would be applied to unreimbursed expenses attributable to the coronavirus that are not obligated to be reimbursed by other sources before Provider Relief Fund payments are used for lost revenue. SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Reporting Federal Department ? U.S. Department of Health and Human Services COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, Federal Assistance Listing # 93.498 County Department ? Cook County Health Finding 2022 ? 010 (Continued) CRITERIA (Continued) Per the Provider Relief Fund and ARP Rural Payments, Frequently Asked Questions (FAQ) (last updated 2/25/2022), Use of Funds Section (modified 8/30/2021), ?To be considered an allowable expense under the PRF, the expense must be used to prevent, prepare for, and respond to the coronavirus. Reporting Entities are required to maintain adequate documentation to substantiate that these funds were used for health care-related expenses or lost revenue attributable to the coronavirus, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. Reporting Entities are not required to submit that documentation when reporting. Providers are required to maintain supporting documentation that demonstrates costs were incurred during the period of availability. The Reporting Entity is responsible for ensuring that adequate documentation is maintained.? 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D ? Post Federal Award Requirements, Section 200.303 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.? CONDITION During the current audit period, Cook County Health (CCH) did not accurately prepare its Period 2 report submitted via the HRSA Reporting portal in accordance with the federal reporting requirements. CAUSE Based on discussions with management, the cause of this finding resulted from a misunderstanding of the expense data that was rolling/ inputted in the HRSA portal. The unreimbursed expenses line should have been inputted as Other PRF Expenses. CCH Management has already instituted a Corrective Action Plan (CAP) to prevent future occurrence. EFFECT Failure to ensure the Period 2 report is accurately prepared could impair the grantor agency?s ability to adequately monitor the federally funded program. Also, this failure resulted in inaccurate reporting of other PRF expenses and loss revenue during Period 2 Reporting, which will impact the subsequent and future PRF Period reports under the program. SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Reporting Federal Department ? U.S. Department of Health and Human Services COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, Federal Assistance Listing # 93.498 County Department ? Cook County Health Finding 2022 ? 010 (Continued) QUESTIONED COSTS None. CONTEXT During the prior audit period, we noted that Period 1 report submitted to HRSA was prepared in error, which resulted in a 2021 audit finding and subsequent corrective action planned prepared by CCH to address the finding. During the current audit period, we noted CCH did not have adequate time to implement its corrective action plan. As a result, the Period 2 report (which included $31,163,323 as payments received during the period from July 1, 2020 to December 31, 2020) submitted to HRSA was also prepared in error. Specifically, we noted the following: *The $31,163,323 categorized as other PRF expenses included amounts reimbursed by FEMA program(s), hence reimbursed from other (federal) sources. Hence, this amount was reported in error, which is a violation of the HRSA reporting requirements. *The other assistance received section of the report does not appear to include all other federal assistance received by CCH during the year. *CCH used the same methodologies included in the Period 1 Report to calculate its incremental costs attributable to the coronavirus. CCH (based on their understanding of the HRSA Provider Relief document modified 12/14/2020, which permitted reimbursement of marginal increased expenses related to the coronavirus) determined its net unreimbursed/incremental expenses incurred by calculating the increase in cost per (patient) discharge during the period of availability. These incremental costs per discharge were then applied to the discharge adjusted factor indicator (calculated by CCH as admits or discharges (excluding newborns) multiplied by (total charges/in-patient charges)) during the same period. This methodology resulted in total estimated incremental costs during Period 2 reporting of $72,889,648 which (after excluding expenses reimbursed from other sources reported of $29,966,420) resulted in net unreimbursed expenses attributable to coronavirus of $42,923,228 during the period of availability. However, we noted the current HRSA guidance, (FAQ, modified 2/25/2022, which was applicable during Period 2 reporting) no longer included language which permitted the reimbursement of such marginal increased expenses related to the coronavirus. SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (Continued) Reporting Federal Department ? U.S. Department of Health and Human Services COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, Federal Assistance Listing # 93.498 County Department ? Cook County Health Finding 2022 ? 010 (Continued) CONTEXT (Continued) Overall, it was noted that CCH had unreimbursed (unused) loss revenues available to be applied to the reporting period of $38,654,147, which exceeded the $31.6M payments received. This unused loss revenue could have been applied if the report had been accurately prepared. IDENTIFICATION OF REPEATED FINDINGS Repeated (Prior Finding No. 2021-003) RECOMMENDATION We recommend that CCH implements its prior corrective action plan for any future reports to be prepared and submitted under the PRF program. Also, procedures should be implemented to ensure accurate preparation of its report(s) in accordance with HRSA reporting requirements and to ensure the report(s) are properly reviewed by a second individual prior to submission. In addition, we suggest that CCH maintains an internal schedule to accurately track its related PRF expenses and loss revenue during each applicable reporting period, especially in instances where the prior period(s) reports were inaccurately prepared. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The County agrees with the finding and recommendation. The County?s corrective action plan is on pages 65-66.