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 and Period 2 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 and HC entities which consists of comparing actual quarterly revenues in calendar years 2020 and 2021 to actual quarterly revenues in calendar year 2019. Condition ? The operations of HC were consolidated into KHMC as of December 31, 2020. When LHMC calculated their lost revenues, they included HC?s revenue for both 2020 and 2021 instead of only the 2021 information. This resulted in LHMC reporting higher lost revenues than the detailed reports supported in Period 1. This also affected the lost revenues reported in Period 2 for LHMC. HC filed its own report for Period 1, which included their revenues for 2019 and 2020. Zeros were entered for 2021, which resulted in reporting higher lost revenues than the detailed reports supported in Period 1. Cause ? The Corporation did not have adequate internal controls to ensure the lost revenue calculation was done in accordance with the terms and conditions of the grant.Effect ? The impact of the above condition was as follows: Questioned Costs ? None reported. After recalculating the lost revenue, the amount 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 lost revenue calculation is completed according to the terms and conditions of the grant. Views of Responsible Officials - Management agrees with the finding.