Finding Text
2023-001 Department of Health and Human Services
Federal Financial Assistance Listing #93.498
Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 4 TIN #
Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting
Material Weakness in Internal Control Over Compliance and Material Noncompliance
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 District did not reduce expenses by amounts reimbursed by other sources related to cost-based reimbursement, as some costs incurred in providing services to the Medicare population are reimbursed.
Cause: The District did not have an adequate internal control policy in place to ensure review of amounts reimbursed by other sources.
Effect: The District submitted expenses over their actual allowable expenses.
Questioned Costs: $369,475
Context: A nonstatistical sample of 9 expenditures were selected for testing, which accounted for $1,155,652 of $1,314,047 direct program expenditures. None of the expenditures were reduced by reimbursements from other sources, which resulted in unallowable costs of $369,475 when considered for the entire population.
Repeat Finding from Prior Years: No
Recommendation: We recommend that the District enhance internal control policies to ensure that expenses are reviewed for reimbursement from other sources and meet the requirements of the federal program.
Views of Responsible Officials: Management agrees with the finding.