Finding Text
Finding 2022-001 Material Weakness and Material Noncompliance Assistance Listing Number: 93.498 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions Criteria: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Questioned Costs ? $24,871,110. This represents the difference between the $51,502,963 of expenditures reported by the System through the Department of Health and Human Services PRF portal and the $26,631,853 determined to be eligible expenditures. The System used an incremental cost approach for expenses totaling the questioned costs. It could not be determined whether this is an acceptable approach under HRSA guidelines or whether these expenses were reimbursed by other sources. Condition: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions. Those terms and conditions outlined the usages of the PRF distributions received, specifically related to expenses. PRF distributions should only be used to prevent, prepare for, and respond to the coronavirus that have not been reimbursed from other sources or that other sources are not obligated to reimburse. Management should have effectively designed controls in place to prevent, or detect and correct, noncompliance and related financial reporting misstatements. Context: The System?s internal control over Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distributions resulted in ineligible costs and inaccurate lost revenues reported on the Department of Health and Human Services PRF portal submission. Effect: The System overstated expenses and understated lost revenues submitted through the Department of Health and Human Services PRF portal for the second period of availability. Cause: Lack of effectively designed and implemented controls over expenditures and lost revenues submitted through the Department of Health and Human Services PRF portal for the second period of availability. Identification of prior year finding: N/A Recommendation: Effective controls over compliance should be implemented to ensure expenditures and lost revenues submitted through the Department of Health and Human Services PRF portal meet the criteria established in the terms and conditions. Management Response: See management?s corrective action plan included at the end of the report.