Finding Text
Department of Health and Human Services
Federal Assistance Listing/CFDA #93.498
Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 1 TIN #730929722
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting
Material Weakness in Internal Control Over Compliance and Noncompliance Not Considered Material
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: The total eligible expenses included on the Period 1 Report did not agree with the underlying supporting schedules. In addition, there were errors identified in the underlying supporting schedules.
Cause: The Hospital did not have an adequate internal control policy in place to ensure a review and approval of the Period 1 Report was performed by someone other than the preparer of the report.
Effect: The Hospital claimed eligible expenditures that were not supportable.
Questioned Costs: None. While there was an overstatement of allowable expenses of $19,356, the Hospital had excess lost revenues of $268,046 and additional underreported lost revenues of $459,421, which covers the error.
Context: Sampling was not used. We tested the key line item related to Other PRF Expenditures in identifying the error.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Hospital implement a control process which includes a documented secondary review and approval of required reports to be submitted to the federal agency prior to submission. In addition, we recommend the report be based upon supporting schedules that also includes a documented secondary review and approval. Any expenses claimed for the federal program should be calculated correctly and have adequate supporting documentation.
Views of Responsible Officials: Management agrees with the finding.