Information of the federal program:
Federal Grantor: United States Department of Treasury
Assistance Listing No.: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Pass-Through Grantor: State of Illinois Department of Healthcare and Family Services
Ascension Ministry Market: Illinois
Pass-Through Award Number: ARPA230159, ARPA230263, ARPA230050
Pass-Through Award Period: 05/01/2022-06/30/2023
Pass-Through Grantor: Mayor and City Council of Baltimore, Through MONSE
Ascension Ministry Market: Maryland
Pass-Through Award Number: Not applicable
Pass-Through Award Period: 07/01/2022-06/30/2023
Criteria or specific requirement (including statutory, regulatory, or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CRF Subpart E section 200.403 states the following: “Costs must meet the following general criteria in order to be allowable under Federal awards: (c) be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity; and (g) be adequately documented.”In addition, per the State of Illinois, Department of Healthcare and Family Services and Presence Senior Services Agreement No. ARPA230050, Nazarethville Retirement Home Agreement No. ARPA230159, and Presence Life Connections Agreement No. ARPA230263, Exhibit A requires the awards pursuant to this program to comply with the following criteria:
“1. 65% of the funds awarded under this grant shall comply with the following criteria.
a) Shall be expended only for premium pay for eligible workers; in addition to any wages or remuneration the eligible worker has already received; and shall be subject to the other requirements and limitations set forth in the American Rescue Plan Act of 2021 and related federal guidance.
b) Upon receipt of funds, recipients shall distribute funds such that eligible workers receive an amount up to $13 per hour, but no more than $25,000 for the duration of the program. Recipients shall provide a written certification to the Department acknowledging compliance with this paragraph.
d) Each recipient under this paragraph shall submit appropriate documentation acknowledging compliance with State and federal law. For purposes of this section, “eligible worker” means a permanent staff member, regardless of union affiliation, of a facility licensed by the Department of Public Health under the Nursing Home Care Act as a skilled nursing facility or intermediate care facility engaged in “essential work”, as defined by Section 9901 of the American Rescue Plan Act of 2021 and related federal guidance, as well as whose total pay is below 150% of the average annual wage for all occupations in the worker’s county of residence, as defined by the Bureau of Labor Statistics Occupational Employment and Wage Statistics; or is not exempt from the federal Fair Labor Standards Act overtime provisions.”
Condition:
Illinois – Internal controls over the review and approval of program expenditures for allowability and period of performance under the federal program were not in place for Presence Senior Services (Agreement No. ARPA230050), Nazarethville Retirement Home (Agreement No. ARPA230159), and Presence Life Connections (Agreement No. ARPA230263) administering the federal program.Illinois – Nazarethville Retirement Home (Agreement No. ARPA230159) did not meet the criteria per Exhibit A, paragraph 1.a. In addition, Presence Senior Services (Agreement No. ARPA230050), Nazarethville Retirement Home (Agreement No. ARPA230159), and Presence Life Connections (Agreement No. ARPA230263) did not comply with the criteria per Exhibit A, paragraphs 1.b and 1.d.
St. Agnes Healthcare, Inc., Maryland – Timecards for employees that were submitted for substantiation of funding for the federal program were not consistently reviewed and approved.
Cause: Ascension Living, Illinois:
•Ascension Living did not have effective internal controls in place over the review and approval of expenses and period of performance for certain locations administering the grant.
•Ascension Living did not have internal controls in place to review and approve the requirements in Exhibit A and the analysis performed over the requirements included in Exhibit A of the program grant agreements.
St. Agnes Healthcare, Inc., Maryland – Timecards were processed without manager approval.
Effect or potential effect:
Expenses may be charged to the federal award that are not in compliance with the federal or pass-through grant agreement.
The System was not in noncompliance with the terms and conditions of the federal program.
Questioned costs: $59,425 – Assistance Listing No. 21.027, Pass-Through Award Number ARPA230050
Context: Ascension Living, Illinois:
• At one location, per Exhibit A, paragraph 1.a., only 62% of the funds were spent for premium pay versus the required 65%, resulting in a shortage of premium pay of $57,700.
• At one location, per Exhibit A, paragraph 1.b., one employee’s salary exceeded the limit of $25,000 allowable to be funded by the award by $1,725.
Total expenses subject to the requirements of Exhibit A of the grant agreement were $2,105,470, representing 44% of total federal expenditures of $4,798,357. For Assistance Listing No. 21.027, total expenses for Ascension Living, Illinois, were $3,474,484, representing 72% of total federal expenditures of $4,798,357 for the year ended June 30, 2023.
St. Agnes Healthcare, Inc., Maryland – For two (totaling $4,526) of ten (totaling $21,950) (11%) payroll transactions sampled during the fiscal year, the employee’s timecards did not have evidence of review and approval by the employee’s manager for two months. For Assistance Listing No. 21.027, total payroll costs for the Maryland location were $113,188, representing 2% of total federal expenditures of $4,798,357 for the year ended June 30, 2023.
Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year.
Recommendation:
Ascension Living, Illinois – Ascension Living should implement internal controls to review the limitations requirement included in Exhibit A of the grant agreement and that the requirements are met prior to drawing down funds, required communication with the grantor is submitted, and required analysis is performed to be in compliance with the terms and conditions of the grant agreements.
St. Agnes Healthcare, Inc., Maryland – The System should reinforce the importance of adhering to its internal controls over the review and approval of timecards.
Views of responsible officials: Ascension Living management acknowledges that internal controls were not working effectively regarding review of the calculated limitations and allocations. Management has reserved the questioned costs and has communicated with the State on their desired method of repayment. For future grants, Ascension Living will implement controls for appropriate review and approval and to have a secondary review to validate calculations.
St. Agnes Healthcare, Inc., Maryland - This finding pertains to retroactive grants where expenses were incurred in previous periods but were subsequently eligible for grant reimbursement. Management is working on creating a report to identify timecards lacking manager approval for exclusion as allowable grant expenses. Grant Accounting is incorporating a Time and Effort tracking feature, a separate approval control to mitigate the issue of timecards lacking manager approval.