Finding 7373 (2023-003)

2023-003 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN# 411392082 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance and Noncompliance Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance 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: There were the expenses claimed under general and administrative category that were in excess of the amounts actually incurred under the program. Also, there was a duplication of utility expenses already claimed for the month of November 2021. Cause: The Medical Center claimed general and administrative costs that did not agree to supporting documentation due to clerical errors within the final expenditure listing. Effect: Expenditures included within the special report submitted to the Department of Health and Human Services for Period 4 TIN# 411392082 relating to general and administrative expenses were overstated by $53,954. Questioned Costs: The Medical Center has additional lost revenue in Period 4 that exceeds the general and administrative expenses. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Expenses included within the special report were overstated by $53,954. Context/Sampling: Summary level testing was performed over mortgage, utilities, and insurance. Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend implementing a control process that reviews the clerical accuracy to the supporting detail being used to claim the allowable costs under the program. Views of Responsible Officials: Management agrees with the finding.