Finding Text
2023-003 Preparation of Provider Relief Fund Reporting Portal Submission
U.S. Department of Health and Human Services
Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (93.498)
Federal Award Year 2022-2023
Criteria: The requirements for reporting are contained in the program legislation, Federal awarding agency regulations, and the terms and conditions of the award. Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure the Provider Relief Fund (PRF) reporting portal submission is accurate.
Condition: During our testing over reporting, we observed management did not have effective internal controls in place to ensure the reporting portal submission was completed accurately. In the report submitted to Health Resources and Services Administration (HRSA) for period 4, the Hospital mistakenly reported $1,600,451 as American Rescue Plan (ARP) Rural expenses and $187,140 as other PRF expenses. The Hospital entered the total Federal award cash receipts for period 4 as the reportable PRF and ARP Rural expenses for payments received during period 4. The PRF and ARP Rural expenses should have been zero in the portal as the Hospital did not track PRF and ARP Rural expenses.
The Hospital properly included lost revenue information in the report within the lost revenue section of the report; however, due to the PRF and ARP Rural expenses being incorrectly reported, none of the PRF and ARP Rural payments reported were used for lost revenues in the report submitted for period 4. As a result, the total unused lost revenues line reported $5,775,235 but should have been $3,987,644.
Additionally, the Hospital incorrectly indicated it reported lost revenue based on the 2020 Budgeted Revenue reporting method. The lost revenue information included in the report was calculated using the Alternate Reasonable Method.
Cause: The Hospital did not design or have internal controls in place to ensure the period 4 report was adequately reviewed before submission to HRSA.
Effect: Amounts reported as ARP Rural expenses and PRF expenses were in the PRF reporting portal submission were inaccurate for period 4. Additionally, due to the incorrect lost revenue reporting method being selected, amounts reported as budgeted net patient service revenue in the reporting portal submission were actual net patient service revenue.
Questioned Costs: None
Context: Per the PRF reporting portal submission for period 4, the Hospital reported lost revenues available to be used in the current reporting period in excess of the PRF and ARP Rural payments reported. Additionally, the lost revenue calculation included data from 6 calendar quarters that was labeled as budgeted net patient revenue. Of these 6 quarters, only 2 of the quarters were budgeted net patient revenue amounts. The other 4 were actual net patient service revenue amounts.
Repeat finding in the prior year: No
Recommendation: We recommend that management correct the error in the period 4 PRF reporting portal submission. We also recommend that management develop and implement effective internal controls to ensure accurate reporting.
View of responsible officials of the auditee: Management agrees with the finding and recommendation.