Finding 960400 (2022-001)

(3) Findings and Questioned Costs Relating to Federal Awards Finding 2022-001 Federal Agency: United States Department of Health and Human Services Program Name: Provider Relief Fund (PRF) Assistance Listing Number: 93.498 Criteria: PRF recipients that received one or more payments exceeding $10,000 in the aggregate during a Payment Received Period are required to report on several required data elements as part of the post-payment reporting process. Reporting must be completed and submitted to the Health Resources and Service Administration (HRSA) the reporting dates specified by HRSA. Additionally, Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 03(a) states 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. 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). Condition: During our audit procedures for Beth Israel Lahey Health’s PRF Reporting Periods 2 and 3, we identified an error in the amount reported on the Lost Revenue in Excess of Total Distributions line item for the period of January 2020 to June 2021 for Beth Israel Deaconess Medical Center (BIDMC). Management incorrectly utilized the same quarterly budget amount for Quarter 3 and Quarter 4 within their internal lost revenue calculations spreadsheet. The error resulted in $160,417,776 being reported as Lost Revenue in Excess of Total Distributions within the report instead of $167,748,797, or understating the lost revenue amount by $7,331,021. We deemed this to be a significant deficiency in internal controls. Cause: The condition found results from the existing internal control review over the accuracy of the underlying data used to prepare the report not being performed at a precision level that detected the error duplicating the budget amounts from Quarter 3 to Quarter 4. Possible Asserted Effect: Failure to ensure accuracy of amounts reported as “Lost Revenues in Excess of Total Distributions” may result in HRSA relying on incomplete or inaccurate information associated to the BILH’s utilization of PRF funds. Questioned Costs: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding: This is not a repeat finding. Recommendation: We recommend BILH enhance its internal controls over PRF reporting to ensure each of the data elements reported to HRSA are accurate and result in amounts consistent with its underlying records. Views of Responsible Officials: Management will enhance its internal controls over PRF reporting by requiring co-sign off by the VP of System Services Accounting and the VP of Revenue/Reimbursement.