Finding Text
Identification of the Federal Program: U.S. Department of Health and Human Services ? COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Distribution ? 93.498 Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: RWHS selected option II to calculate lost revenue for its subsidiary, which consists of a comparison of actual results during the period of availability to the approved budget in 2020 and 2021. The budget was required to be approved by March 27, 2020. The budget used for 2021 and 2022 was not approved by the required date. Cause: RWHS did not have an effective internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the use of option II was accurate and in accordance with the terms and conditions of the federal award. Effect: The reporting to HHS for Period 4 was considered incorrect. Budgeted amounts reported for 2021 and 2022 were not from a budget approved by March 27, 2020. Questioned Costs: None reported. Context: Key line items were tested on the Period 4 PRF report. Repeat Finding from Prior Year: No Recommendation: We recommend RWHS enhance its existing internal control processes to ensure the lost revenue calculation claimed meets the requirements of the federal program. Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review the lost revenue calculation to ensure such amounts are in accordance with the terms and conditions of the federal award.