Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: COVID-19 Provider Relief Funds Assistance Listing Number: 93.498 Award Period: Period 3 ? Provider Relief Funds Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Compliance Requirement: Reporting Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of reporting. The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for direct expenses or lost revenues that are attributable to coronavirus. Condition: During our testing, we noted that the Organization did not meet its requirements to accurately report on the funds used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for direct expenses or lost revenues that are attributable to coronavirus. For the reporting compliance requirement, accurate reports are required to be submitted each period as defined in the terms and conditions of the program. The Period 3 report contained an error in the information that was submitted, which resulted in an error in the total amount of calculated lost revenues and the amount of expense reported. Questioned costs: None. Context: During our testing, it was noted that the Organization erroneously reported lost revenue amounts for Quarter 1 and Quarter 2 of 2022 in the Period 3 reporting submission. Instead of entering the correct amounts for these quarters, management entered amounts related to their fiscal quarters which were previously reported in Quarter 3 and Quarter 4 of 2021. This was due to the Provider Relief Fund reports being based upon calendar year and the Organization is a fiscal year end of June 30. Further, the Organization erroneously reported $3,475 of infection control expenses in Quarter 1 of 2021 that could not be supported by infection control expenses that were incurred during that quarter; however, there were sufficient infection control expenses in Quarter 2 of 2021 that were not reported during other Provider Relief Fund reporting submissions. As a result, there were no questioned costs. Cause: Management oversight. Effect: While the lost revenues section of the Period 3 report, specifically related to quarterly revenues in 2022, was incorrectly reported, this error did not have an impact on their ability to recognize the funds received as lost revenues were not used on any of the Provider Relief Funds reported on the Period 3 report. Further, although the amount of expenses reported to support the funds could not be fully supported, there were sufficient expenses in other quarters that could support the amount recognized. As a result, there were no questioned costs as a result of this error. Recommendation: The Organization should review all reports prior to submission to ensure they are complete and accurate, and that the information is supported by detailed schedules of all expenses and internal financial statements for lost revenues. Views of responsible officials: There is no disagreement with the audit finding.