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Finding 2022-002 ? Reporting ? Significant Deficiency in Internal Control Over Compliance Federal Program: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (Assistance Listing #93.498) Federal Agency: U.S. Department of Health and Human Services Award Year: 2021 Criteria: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program, providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. Condition: During our testing of the reporting of expenses that were reimbursed by Provider Relief Fund distributions for Periods 3 and 4, it was identified that approximately $210 thousand of reported expenses did not comply with the terms and conditions of the Provider Relief Fund Program and were therefore ineligible to be reimbursed under Provider Relief Fund distributions. Cause: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health has experienced business and staffing disruptions in recent fiscal years. This resulted in a lack of sufficient review over submissions and led to errors in reporting expenses under the Provider Relief Fund Program for Periods 3 and 4. This situation, coupled with the evolving and complex nature of the specific terms and conditions of the Provider Relief Fund Program, is the primary cause of the condition noted above. Effect or potential effect: Due to the above noted cause, expenses were reported to HRSA as being reimbursed by the Provider Relief Fund distributions for Period 3 and 4 when the expenses did not comply with the terms and conditions of the Provider Relief Fund Program. However, the total lost revenue amounts from the Periods 3 and 4 Provider Relief Fund reporting demonstrate a significant amount of cumulative unused lost revenue that would exceed the total ineligible expenses noted as a result of the Period 3 and 4 reporting errors. Questioned costs: None to be reported. Context: During the fiscal year ended December 31, 2022, health care providers were subject to staffing shortages as well as increased operational challenges as a result of the COVID-19 pandemic. As a result, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health did not have sufficient staffing levels to perform precise reviews to validate the eligibility of expenses subject to Provider Relief Fund reporting for Periods 3 and 4. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health implement review controls at a sufficient precision threshold to detect and identify errors in reporting expense amounts that do not comply with the terms and conditions of the Provider Relief Fund Program. Views of responsible officials: NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health agrees with the finding and management has implemented a corrective action plan. Management has implemented a more precise review control over future federal award reporting submissions to ensure all reported expenditures comply with the terms and conditions of the federal award. Further, NorthBay Healthcare Corporation and its Affiliates dba NorthBay Health had sufficient unused lost revenues of approximately $114,915,000 and $133,021,000 from the Periods 3 and 4 Provider Relief Fund reporting to fully cover the Provider Relief Fund distributions for Periods 3 and 4, respectively.