Finding 972300 (2022-003)

Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Periods 3 & 4 TIN #88‐0065829 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria ‐ The Hospital must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Hospital is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. The Hospital selected option iii to calculate lost revenue which allows for an alternate reasonable methodology to be used. Condition – The Hospital opted for a budget to actual comparison for the calculation of lost revenue as an alternate reasonable methodology, however the actual amounts used did not consider adjustments during the fiscal year. Cause ‐ The Hospital did not have an internal control process in place to ensure the accuracy of the reporting key line items and excluded adjustments to revenue from the actual balances used in the lost revenue calculation. Effect – There was no effect on the amount of lost revenue applied against the funding received, however there were errors in the key line items reported that resulted in an underreporting of lost revenue. Questioned Costs ‐ None reported. Context ‐ Key line items were tested on the Period 3 & 4 Department of Health and Human Services special reports. Repeat Finding from Prior Years ‐ Yes Recommendation ‐ We recommend that management review the calculation methodology for lost revenues and ensure the amounts used for actual revenues agrees to the amounts presented in the financial statements. Views of Responsible Officials ‐ Management agrees with the finding.