Finding Text
Federal program
Federal Assistance Listing Number 93.498
U.S. Department of Health and Human Services
COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution
Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting
Material Weakness in Internal Control over Compliance and Material Noncompliance
Criteria
The terms and conditions of the CARES Act provider relief fund state the expenses reported need to be for costs incurred to prevent, prepare for, and/or respond to coronavirus during the reporting period.
Condition
Management appears to have misinterpreted provider relief fund reporting guidance resulting in certain costs being included as allowable during its June 30, 2021 reporting period.
Cause
Management’s interpretation of the reporting guidance was that certain direct patient care costs of the Health Center, excluding costs reimbursed by others, could be included as allowable costs for provider relief fund reporting.
Effect
Management included amounts in the PRF reporting portal which do not appear to be eligible based on the terms and conditions of the PRF distributions.
Questioned costs
Management provided excel workbooks totaling $3,810,750 in allowable PRF expenses and reported total expenses of $3,526,740 in the PRF reporting form, which equals the amount of PRF funds received for period 1. Additionally, as further described in Finding 2021-006, there were several individual expense reporting categories where the Health Center’s excel workbook of costs did not match to the reporting expense categories. We performed our testing on the amounts provided in the excel workbook totaling $3,810,750. During our testing, we noted the following amounts as questioned costs:
Personnel:
Based on our review of existing guidance, we are questioning $285,248 of costs as they relate to providing direct patient care and were not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal.
Fringe Benefits:
Based on our review of existing guidance, we are questioning $410,321 of costs as they relate to fringe benefits associated with salaries and wages either not claimed as COVID-19 and/or related to salaries and wages noted in the preceding section as not specifically identified as services provided to COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal.
Supplies:
Based on our review of existing guidance, we are questioning $215,567 of costs as the Health Center could not provide support specifically identifying the costs as used to treat COVID-19 patients. The questioned costs were determined based off of detail testing and review of the underlying supporting detail workbook used by management to accumulate cost reported in the PRF reporting portal.
Perspective/Context
The errors appear to be due to management’s interpretation that certain direct patient care costs, excluding costs reimbursed by others, could be reported as allowable during the June 30, 2021 reporting period.
Recommendation
We suggest Health Center management contact HRSA to determine a corrective action regarding the potential costs reported that may not be allowable.
Views of responsible officials and planned corrective actions
Management agrees with the noted finding. The Health Center does have amounts that could have been reported as lost revenues that would cover some of the questioned costs. The Health Center was unable to include the lost revenue amounts in the original submission because the website did not allow submission of lost revenues if enough costs were reported to cover the PRF funds received.