Finding 967632 (2023-003)

2023-003 Significant Deficiency in Internal Controls over Compliance and Compliance – Reporting (Bartlett Regional Hospital enterprise fund) Agency: U.S. Department of Health and Human Services, Health Resources and Services Administration Program(s) and Federal Award Listing Number(s): 93.498 Provider Relief Fund (Covid 19 – American Rescue Plan Rural Payments) New or Repeat: New Criteria: Per 2 CFR 200.303, the nonfederal entity is responsible for maintaining effective internal controls over submissions of financial reports to comply with terms and conditions of the Federal award. Condition: Internal controls were not sufficiently designed and implemented to ensure a key line item “total other Provider Relief Fund (PRF) expenses” in the PRF report for PRF Phase 4 and American Rescue Plan (ARP) expenses for payments received July 1, 2021 to December 31, 2021 was accurate. Context: The total line was reported cumulatively, for the PRF and ARP program rather than specific to the PRF Phase 4 and American Rescue Plan (ARP) funding listed in the report instructions. The line was over reported by $266,448. Effect: Costs, totaling $266,448, were already reported for the previous reporting period and therefore are considered unallowable costs. This error in reporting is considered reportable non-compliance as the amount is above the questioned cost threshold. Questioned costs: Questioned costs are $226,448 of “total other Provider Relief Fund (PRF) expenses” erroneously reported. Cause: Lack of review by an individual independent of preparation process, due to turnover and vacancies in key finance department positions, at Bartlett Regional Hospital, and a misunderstanding of reporting requirements as being cumulative, rather than funding specific. Recommendation: As the report cannot be revised and resubmitted we recommend the City and Borough follow the granting agency’s remedy for non-compliance, which is to indicate a reduction in healthcare related expenses and an increase to the lost revenue expense total that was reported, in management’s corrective action plan. View of responsible officials: Management concurs with this finding, see corrective action plan.