Finding Text
Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund and American Rescue Plan Rural Distribution; Material Weakness; Activities Allowed or Unallowed, Allowable Costs/Cost Principles Compliance Requirement
Criteria: Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution was established under the Coronavirus, Aid, Relief, and Economic Security Act (Pub. L. No. 116‐136, 134 Stat. 563) and the Coronavirus Relief and Response Supplemental Appropriations Act (Pub. L. No. 116‐260) and the American Rescue Plan Act of 2021 (Pub. L. No. 117-2). The PRFs are to be used to prevent, prepare for, and respond to coronavirus. The PRFs are to reimburse recipients only for healthcare related expenses or lost revenues that are attributable to coronavirus. The PRF funds may not be used to reimburse expenses or losses that have been reimbursed by other sources or that other sources are obligated to reimburse.
Condition: We noted instances in our testwork in which the invoice claimed as federal expenditures lacked the documented proof of approval from the appropriate department heads.
Cause: During the period of transition following the Medical Center's disassociation from another health system, the invoice approval process changed from an electronic workflow to a manual workflow as the Medical Center changed accounting systems. During this period, the routing of contract labor invoices for approval took longer since it was no longer part of the electronic work flow. As a result, the accounting department began coding the invoices in order to get the vendors paid so that the vendors could continue providing much needed healthcare services during the COVID-19 pandemic. We noted, however, that there were no processes in place to obtain the department head's approval for the account coding performed by accounting and approval of the invoice for payment was not documented during the transition period.
Effect: There is an increased risk that federal awards could be expended for activities or costs that are not allowable under the federal program.
Questioned Costs: None.
Perspective Information: In our sampling testwork, there was a total of 53 contract labor invoices selected for testing out of a total sample size of 60. Of the 53 invoices, 33 invoices did not have the necessary documented approvals from department heads.
Repeat Finding: N/A
Recommendations: We recommend the Medical Center follow its established policies for approving contract labor invoices for payment and that the approval process be documented.
Views of Responsible Officials: This finding was isolated to two vendors that provided the Medical Center with much needed contract labor during the COVID-19 pandemic. With the nationwide shortage of healthcare workers, the Medical Center was forced to utilize more contract labor in order to maintain delivery of healthcare services for all patients, including patients with COVID-19. Contract labor invoices often covered services in multiple departments, and so each invoice would go through multiple department heads for approval which required additional time. This multi-step approval process created delays in paying the contracting vendors. In order for vendors to continue to provide staffing services, accounting personnel began coding the invoices during a short transition period following the disassociation from a larger health system so that the vendors could be paid promptly. While the control deficiency identified during the audit did affect the processing of invoices, it did not impact the amounts claimed with the PRF funds. The issue has been addressed and corrected during FY 2023.