Finding Text
Finding 2022-001 - Material Weakness in Internal Control - Reporting Assistance Listing No.: 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-through Agency: Not applicable Award Number / Year: 2020 Criteria: All recipients of PRF payments (excluding Skilled Nursing Facility (SNF) and Nursing Home Infection Control Distribution payments) not fully expended on health care-related expenses attributable to COVID-19 may be applied to patient care lost revenues, if applicable. Recipients may choose to apply PRF payments toward lost revenues in accordance with the specified directions issued by HHS (collectively, the Guidance) using one of the three following options: Option i: of the difference between actual patient care revenues; Option ii: of the difference between budgeted and actual patient care revenues; Option iii: calculated by any reasonable method of estimating revenues. Condition/Context: The Company did not complete the PRF reporting in accordance with the U.S. Department of Health and Human Services guidance. The Company excluded from patient care revenue the amount attributable to independent living and assisted living related services provided to residents. Additionally, the report did not contain a documented review and approval of the reports prior to submission. Clerical errors were identified during testing totaling $25,179 and expenses were counted twice in error totaling $38,423. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Questioned Costs: $63,602 Cause: Management failed to review the submissions prior to finalizing and did not correct errors in the submissions. 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 and assisted living related services will continue to be excluded from patient care revenues. 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 and assisted living related services will continue to be excluded from patient care revenues. Views of Responsible Officials: The Company agrees with the finding. It is believed that verifiable lost revenues were more than sufficient to fully cover the funds received even eliminating these expenditures. Nonetheless, if any additional similar funding is ever sought or received, the Company will implement policies and procedures to ensure there is appropriate review of the submissions and lost revenue calculations. The Company agrees with the finding and 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 independent living unit revenues are included in the lost revenues? calculation.