Finding Text
U.S. Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #237293874; #810413632, #371518772; #810420653; #810540517, and #810247969 Material Weakness in Internal Control over Compliance ? Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Reporting; Material Noncompliance - Reporting 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. The Corporation selected Option i to calculate lost revenue for the LHMC, NWH, HC, and LH Whitefish entities which consists of comparing actual quarterly revenues in calendar years 2020 and 2021 to actual quarterly revenues in calendar year 2019. Note that the revenue calculations also included NOSM and HC which were acquired by LHMC effective December 31, 2020. Condition ? In some of the quarters for certain entities, it was noted that bad debt expenses were higher than revenues, creating a negative revenue for the quarter. As the HHS reporting portal would not allow negative amounts to be entered, a zero was entered into the HHS reporting portal. These negative amounts should have been offset to other quarters or other revenue line items, but were not, which resulted in higher revenue amounts being reported than the detailed reports supported. Cause ? The Corporation did not have adequate internal controls to ensure the lost revenue calculation was done in accordance with terms and conditions of the grant.Effect ? Three of the entities included in the revenue calculation were impacted by this issue and the impact was as follows:Questioned Costs ? None reported. After recalculating the revenue by correcting the above amounts, the amount of lost revenue still exceeded the amount of provider relief funds retained. Context/Sampling ? Key line items were tested on the Period 1 and Period 2 Department of Human Services special report. Repeat Findings from Prior Years ? No Recommendation - We recommend that the Corporation enhance internal controls to ensure the revenue calculation is in compliance with the terms and conditions of the grant. The HHS Hotline is available to assist with concerns with the HHS portal or the calculations. Views of Responsible Officials - Management agrees with the finding.