Finding 976331 (2023-004)

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 – Period 4 TIN #736060835 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 Authority selected Option 3, as defined by HHS, to calculate lost revenue. The calculation of lost revenues contained errors on the Period 4 report to HHS, of which two key line items were considered to have material errors. In total, the impact was a reduction in total lost revenue claimed by $34,975. Cause: The Authority did not have adequate internal controls policy in place to ensure lost revenues included accurate calculations by quarter, as required by HHS. Effect: The lost revenues section on the Period 4 report to HHS was considered incorrect. There is a possibility that ineligible lost revenues may be claimed under the program and the report may not be accurately completed. Questioned Costs: None. After consideration of all errors on the Period 4 report to HHS, the Authority still had $12,142,106 of unused lost revenues. Context: All key line items were tested on the Period 4 report to HHS. Repeat Finding from Prior Years: No Recommendation: The Authority’s processes should be amended to ensure the lost revenue calculation not only agrees with system generated reports, but also includes all required patient care revenue. Views of Responsible Officials: Management agrees with the finding