Finding 964005 (2023-003)

Condition – During the fiscal year ended June 30, 2023, Saint Agnes Medical Center Fresno (“Fresno”) was granted multiple project fundings under the Federal Emergency Management Agency’s (FEMA) Public Assistance grant program in response to the COVID-19 public health emergency. A total of $7,336,096 of FEMA assistance payments were received from the pass-through entity, California Governor's Office of Emergency Services. The eligible expenses that were obligated and disbursed for FEMA funding were incurred between March 20, 2020 and July 31, 2022, during which some of the expenses were also eligible for and reimbursed by another federal source of funding (COVID-19 Provider Relief Fund and American Rescue Plan – “PRF”). It was discovered that a total of $670,625 COVID-19 eligible expenses (i.e., occupancy and supplies) that were reimbursed by PRF were duplicative of those reported as project obligations to FEMA. Criteria – According to § 200.403(f) of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, “allowable costs must not be included as a cost of any other federally financed program in either the current or a prior period”. Cause – Prior to submitting the project applications to FEMA, the Fresno accounting department aggregated the total amount of eligible expenses available to be used for both the FEMA and PRF programs and determined that there were more expenses than the total award amounts for both programs. However, they did not review expenses by category and did not identify that expenses reported in the PRF portal filings in the occupancy and expense categories when combined with occupancy and supplies expenses reported for FEMA resulted in duplicative submission of some expenses. Effect – Fresno included certain occupancy and supplies expenses in both the PRF portal filing and the FEMA project application. Questioned costs – $670,625* **The amount is a questioned cost because there is no mechanism to correct the PRF portal filing to change the categories of expenses to reduce the occupancy and supplies category and increase another category for allowable expenses that have not yet been applied to PRF or FEMA grants. While the amount reported in the PRF portal for the categories of occupancy and supplies expense was overstated because certain costs were applied to FEMA awards, the total amount of expenses reported in the PRF portal requires no revision. Context – The Corporation included $670,625 out of $7,336,096 of expenses that were previously included in a PRF portal filing under the occupancy and supplies category. Fresno has $2,035,190 of additional PRF eligible expenses in other categories that have not been reimbursed by any other grant programs. Repeat Finding from Prior Year – No Recommendation – The Corporation should not only look at total expenses that are allowable for use under multiple federal sources of funding, but should also review the expenses at a detailed level to ensure that individual expenses are not double counted.