Finding Text
Finding 2022-002 - Significant Deficiency in Internal Control - Reporting Assistance Listing Number.: 93.498 COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Not applicable Award Number: Not applicable Award Year: 2021 Questioned Costs: None reported Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition/Context: The Corporation included expenses in their Period 3 submission for Mount Nittany Medical Center, TIN 24-0795682, (the Center) that were previously allocated to the federal program and reported in the Period 1 submission, which resulted in expenses in the Period 3 submission being inaccurately reported and overstated by $3,073,785. Effect: As a result of the error, $3,073,785 of expenses were inaccurately reported in the Period 3 submission for the Center. Cause: An oversight by management during the review process that failed to identify the error in the reporting of expenses. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. In addition, we recommend that management correct the errors by off-setting against unused lost revenues in their Period 4 submission. Views of Responsible Officials: The Corporation agrees with the finding. As the Center has a significant amount of available lost revenues, management has adjusted the previously reported lost revenues to adjust for the questioned costs in the reporting period 4 filing. In addition, they have added steps to their PRF reporting policy to include preparation of a waterfall file which shows the total amount of COVID eligible expenses and the period in which they were allocated for PRF reporting to ensure they do not have a duplication of costs in the future. Beginning with the reporting period 4, they also utilized the portal worksheets provided by HRSA to assist with preparing the filing. Finally, the preparation of the PRF filing for reporting period 4 (and future periods, if needed) has transitioned to the Assistant Controller to include an additional level of review by the Controller.