Finding Text
Department of Health and Human Services
Federal Assistance Listing/CFDA #93.498
COVID‐19 Provider Relief Fund and American Rescue Plan Rural Distribution
Applicable Federal Award Number and Year – Period 1 TIN #450255914
Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting
Material Weakness in Internal Control Over Compliance
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.
Condition: The Medical Center’s final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program, and special report submitted to the Department of Health and Human Services for Period 4 did not have
evidence of being reviewed and approved by a separate individual outside of the preparer.
Cause: The Medical Center did not have an adequate internal control policy in place to ensure review and approval over specifically identified invoices, the final expenditure listing, the lost revenue calculation, or preparation of HHS Period 4 reporting were documented.
Effect: The lack of adequate policies governing the review and approval of invoices, expenditure listing, lost revenue calculation and the HHS Period 4 report increases the risk that employees participating in the federal award administration may not be able to
detect and correct noncompliance in a timely manner. Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program.
Questioned Costs: None reported.
Context: Detail testing was completed over the final expenditure listing of the expenses along with the calculation for lost revenue for activities allowed and unallowable and allowable cost/cost principles. The overall expense listing and lost revenue worksheet
did not have evidence of a review by someone other than the preparer (i.e., population of two). The Report submitted to HHS also did not have a documented secondary review and approval (i.e., population of one).
Repeat Finding from Prior Years: Yes, 2021‐006
Recommendation: We recommend that the Medical Center enhance internal control policies to ensure all invoices are reviewed and approved to ensure all expenses claimed under the federal program are necessary, correct, and meet the requirements of the federal program. We also recommend the Medical Center implement a control process which includes a secondary review and approval of the final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and that there is documented evidence of the review and approval. In addition, the Report submitted to HHS should have a secondary review and approval that is documented.
Views of Responsible Officials: Management agrees with the finding.