Finding 978398 (2023-002)

Material Weakness
Requirement
ABL
Questioned Costs
-
Year
2023
Accepted
2024-06-25

AI Summary

  • Core Issue: The Authority mistakenly reported expenses already claimed in a previous report, leading to inaccuracies in the Period 4 report to HHS.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) regarding effective internal controls over federal awards was not maintained.
  • Recommended Follow-Up: Revise internal control policies to clarify reporting requirements and prevent future errors in expense claims.

Finding Text

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 1 TIN #352276246 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and 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 claimed expenses that were previously claimed and reported on the Period 1 report to the Department of Health and Human Services (HHS). Cause: The Authority misunderstood the reporting requirements on the Period 4 report to HHS and believed the section related to expenses incurred required all expenses for the program from inception, including those claimed on previous reports, be included. Effect: The Authority claimed and reported expenses that were previously claimed and reported in Period 1 report to HHS. Accordingly, the Authority technically claimed expenses already reimbursed by the program and the Period 4 report to HHS contained material errors. Questioned Costs: None reported. While $502,982 of expenses were claimed on the Period 1 report to HHS, the Authority reported excess lost revenues totaling $4,674,489. The Authority intended to utilize available lost revenues when reporting. Context: All key line items were tested on the Period 4 report to HHS. The total error was identified when reconciling the expense details to the Period 4 report to HHS. No sampling was utilized related to this finding. Repeat Finding from Prior Years: No Recommendation: We recommend the Authority modify internal control policies to ensure there is an understanding of reporting requirements to ensure that reports are accurate and amounts are not inadvertently claimed that are considered unallowable. Views of Responsible Officials: Management agrees with the finding.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 401956 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $1.91M
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $251,949