Finding 618328 (2022-003)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-08-23
Audit: 38959
Organization: Lindengrove, Inc. (WI)

AI Summary

  • Core Issue: The Organization inaccurately reported COVID-19 related expenses, leading to a significant deficiency in internal controls over compliance.
  • Impacted Requirements: Compliance with 2 CFR Part 200, which mandates that funds be used only for allowable costs directly related to COVID-19.
  • Recommended Follow-Up: Conduct a thorough review of all reported expenses to ensure they align with internal records and comply with federal requirements.

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 2 ? Provider Relief Funds Type of Finding: Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance Compliance Requirement: Allowable Costs and Activities 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 allowable costs and activities. 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 allowable costs and activities compliance requirement, costs should only be submitted for reimbursement by Provider Relief Funds if they were used to prevent, prepare for, and respond to coronavirus and are accurately supported by internal records. Questioned costs: $523. Context: During our testing, it was noted that the Organization reported infection control expenses in the Period 2 reporting submission that could not be fully supported by internal records of infection control expenses. For its submission, the Organization utilized daily COVID testing logs to compile a master schedule of the number of tests completed by each campus location that was then used to calculate and determine the amount of COVID wages to be reported against its infection control distributions that were received in Period 2. As a result, there were questioned costs determined from our audit of $523 for infection control expenses. The client has identified and isolated $523 of infection control expenses that were incurred in Quarter 3 of 2020 that were not reported during other Provider Relief Fund reporting submissions. Cause: Management oversight. Effect: While the Provider Relief Funds reporting submission was incorrect and management was unable to provide the support behind these infection control costs, they have other COVID expenses that could make up for the costs. Recommendation: The Organization should review all expense amounts entered into the reporting portal submission to ensure the amounts are accurate and agree to internal supporting documentation. Views of responsible officials: There is no disagreement with the audit finding.

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties Cash Management Reporting Significant Deficiency

Other Findings in this Audit

  • 41885 2022-002
    Significant Deficiency
  • 41886 2022-003
    Significant Deficiency
  • 618327 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund $925,704