Finding 966357 (2023-002)

2023-002 Reporting - Establishment of Internal Controls over Calculations and Data Submitted through the HRSA portal for PRF Funds Criteria: The terms and conditions of the Provider Relief Fund (“PRF”) award require that recipients be able to demonstrate that lost revenues or expenses attributable to coronavirus, excluding expenses and losses that have been reimbursed from other sources or that other sources are obligated to reimburse, meet, or exceed total payments from the Provider Relief Fund. Specific reporting requirements exist based on the timing of the receipt of the funds. Data entered into the reporting portal administered by the Health Resources and Services Administration (“HRSA”) must be done within the timeline established by regulation. Condition: Alzheimer’s Community Care, Inc. and Subsidiary's calculation of lost revenues for Period 5 was not calculated correctly and therefore the data input into the reporting portal was not accurate. The calculation prepared by Alzheimer’s Community Care, Inc. and Subsidiary for lost revenues totaled $9,629,293. The audited calculation totaled $1,541,974 resulting in over reporting of the amount of lost revenues of $8,087,319. The amount of PRF revenues received and recognized related to lost revenues is less than the total amount of lost revenues and is improperly reported on the schedule. Based on review of all the quarters included on the final submission, the quarterly reporting for each of the years used in the calculation of lost revenues was not correct and Alzheimer’s Community Care, Inc. and Subsidiary was unable to provide supporting documentation on the amounts reported. As such, we were unable to obtain sufficient appropriate audit documentation to determine compliance with reporting requirements of the major program. Cause: Alzheimer’s Community Care, Inc. and Subsidiary did not establish internal controls to compare the calculation of lost revenues using data from the revenue system to lost revenues calculated based on the revenues reported in the general ledger. Effect: Failure to establish proper internal controls could result in noncompliance with the terms and conditions of the award which can result in action by HHS to recover some or all of the payment. Questioned Costs: Unknown. Context: While reviewing certain balances on the final submission report, we noted Alzheimer’s Community Care, Inc. and Subsidiary was unable to provide adequate support of the amounts reported on the final submission. Recommendation: Alzheimer’s Community Care, Inc. and Subsidiary should establish proper internal controls over the calculation of lost revenues and ensure documentation is maintained, and the data inputted into the reporting portal is accurate. Alzheimer’s Community Care, Inc. and Subsidiary should revise the lost revenue calculation reported to determine the amount of funds, if any, that should be returned to HHS. Views of Responsible Officials: Management concurs with the recommendation.