Finding 972019 (2023-001)

Finding 2023-001 - Significant Deficiency in Internal Control – Activities Allowed or Unallowed, and Allowable Costs/Cost Principles Assistance Listing No.: 93.498 COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not applicable Award Number: Not applicable Award Year: 2021/2022 Questioned Costs: None reported Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award. Condition/Context: The Corporation’s review process failed to detect errors in the calculation of amounts related to the pay for event program that were applied to the Federal award. Errors were discovered in 8 of the 44 items tested for the pay for event program which would have increased the allowable costs eligible for reimbursement under the Federal award by $671. This is not a statistically valid sample. Effect: Expenses applied to the Federal award were not impacted as the errors would have increased the allowable costs eligible for reimbursement. Internal controls related to the review of calculations under the pay for event program were not effective in identifying errors prior to reporting. Cause: An oversight by management during the review process that failed to identify the error in underlying support for pay for event calculations. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding. Management implemented an enhanced review process to validate all amounts reported on the PRF Reporting Portal submission, and to ensure compliance with existing policies and terms and conditions of the Provider Relief Funds. Further action was not considered necessary as the errors would result in increased costs eligible for reimbursement under the Federal award and no further funding is available.