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Finding 2022-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing Number: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not Applicable Award Number/Year: Not Applicable / 2020 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (HHS). Condition/Context: For the reports tested, the Company excluded from patient care revenue the amount attributable to independent living and assisted living related services provided to residents. The Company also inadvertently used data from the wrong period when preparing the lost revenue calculation. As a result of these adjustments, the lost revenue increased from $970,102 to $1,977,744. Additionally, the reports tested did not contain a documented review and approval of the reports prior to submission. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with the established HHS Reporting Requirements. Questioned Costs: None reported. Cause: An oversight by management resulted in using data from the wrong period when preparing their lost revenue calculation. In addition, management believed that the most appropriate option to select was Option i, not Option iii, based on their interpretation of the guidance. Recommendation: We recommend that management review and update, as needed, their procedure for completion of the reporting to ensure that a review and approval of such reporting is completed and documented prior to submission. Additionally, we recommend that management change their selected reporting option from Option i to Option iii in the next required submission, if revenue attributable to independent living related services will continue to be excluded from patient care revenues. Views of Responsible Officials: The Company will implement procedures to ensure an individual who is responsible for reporting will remain current on compliance requirements and review final reports and the related inputs prior to submission. Specifically, the Company will verify Residential Living (IL) revenues and Amortization Income are included in the lost revenue calculation.