Finding Text
Identification: Noncompliance Finding/Material Weakness; Reporting Compliance Requirement Criteria: The financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income, and interest and be supported by source documentation. The PRF and ARPA funds are to be used to prevent, prepare for, and respond to coronavirus. The PRF and ARPA funds are to reimburse recipients for health care related expenses or lost revenues that are attributable to coronavirus. Recipients who received one or more payments exceeding $10,000 are required to report in each applicable reporting period. Condition: The Hospital did not retain supporting documentation for the amounts reported for Period 4 in the reporting portal for expenditures and lost revenues. Cause: The Chief Financial Officer who was responsible for calculating lost revenues and identifying expenses to report as expenditures for the PRF and ARPA funds did not have proper controls in place for tracking and monitoring federal grant expenditures or for following the applicable sections of the Uniform Guidance and the terms and conditions of the PRF and ARPA funds. Effect: The Chief Financial Officer had to recreate Excel spreadsheets for the lost revenue calculation and expenditure listing. The recreated supporting documentation did not tie to the Period 4 reporting submission resulting in lost revenues reported for Period 4 to be overstated by $81,151 and expenditures reported for Period 4 to be overstated by $232. Questioned costs: $41,176; $40,944 lost revenues used and $232 expenditures. Perspective Information: Totals of recreated spreadsheets were compared to the Period 4 reporting submission. Lost revenue questioned costs were arrived at by allocating the Period 4 lost revenues per the reporting submission as a percentage of the Period 4 lost revenues used per the reporting submission (excluding carryover from prior periods) to the overstatement of lost revenues. Expenditure questioned costs are equal to the difference between the Period 4 reporting submission expenditures and the recreated spreadsheet total expenditures. Repeat Finding: N/A Recommendations: We recommend policies and procedures over federal award tracking, monitoring, and reporting be strengthened to ensure compliance with the Uniform Guidance and the terms and conditions of the federal award. Procedures should include maintaining all supporting documentation and verifying the accuracy and completeness of amounts reported. Views of Responsible Officials: In the future, the Hospital will maintain adequate financial records and supporting documentation for federal awards. The Hospital will use a spreadsheet to track all federal awards. The spreadsheet will be prepared by the accountant and reviewed by the Chief Financial Officer. The spreadsheet will be included in the monthly financial information provided to the Board of Directors for review and approval.