Finding Text
Finding 2022-001: Internal control deficiency and noncompliance over amounts reported in the Schedule of Expenditures of Federal Awards (SEFA). Identification of the federal program: Assistance Listing Number 93.498: ? COVID-19 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution ? U.S. Department of Health and Human Services ? Federal award identification number ? Not Applicable ? Federal award year ? Period 2: January 1, 2020 to December 31, 2021 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A Chapter II Part 200 Subpart D 200.303 Internal controls, states: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? In addition, the Office of Management and Budget Compliance Supplement states: ?SEFA reporting amounts for this program (including both expenditures and lost revenues) are based upon the PRF report that is required to be submitted to the HRSA reporting portal. For a FYE of June 30, 2022 and through FYEs of December 30, 2022, recipients should report in the SEFA, the expenditures and lost revenues for the Period 2 (payments received from July 1, 2020 to December 31, 2020) PRF report.? Condition: During our testing over the SEFA, we observed management did not have effective internal controls in place to ensure accurate reporting of the payments received in the SEFA. This resulted in an overstatement of the amount reported in the SEFA. Cause: Management did not have effective internal controls in place to ensure accurate reporting of the payments received in the SEFA. Effect or potential effect: The payments received were incorrectly reported in the SEFA. Questioned costs: None. Context: During our testing over the SEFA, we obtained the PRF report submitted to the Portal and reconciled the total payments received to the SEFA. We observed the payments received totaled $12,100,000, which represents the expenditures and lost revenues for the Period 2 (payments received from July 1, 2020 to December 31, 2020), as compared to the initial amount reported in the SEFA of $12,566,247. This resulted in an overstatement of the amount reported in the SEFA of $466,247. Management?s internal control over the review of the SEFA did not identify this overstatement. The amount reported in the SEFA was subsequently corrected and the corrected amount is reflected in the data collection form. Identification as a repeat finding, if applicable: Yes ? Finding 2021-002. Recommendation: Management should develop and implement internal controls to ensure the completeness and accuracy of the SEFA, including a review of applicable guidance in preparing the SEFA. Views of responsible officials: An additional review process of the SEFA will be implemented to be performed by both the Vice President of Financial Services and the Chief Financial Officer to ensure the SEFA contains complete and accurate reporting of expenditures, and to ensure that applicable guidance is reviewed prior to its finalization.