South Nassau Communities Hospital and Subsidiaries

Finding 2022-001 ? Reporting Internal control deficiency and noncompliance over the calculation of lost revenues attributable to Coronavirus Identification of the federal program: Federal Assistance Listing Number 93.498 ? Program Name: COVID-19 ? Provider Relief Fund ? Grantor: Department of Health and Human Services (HHS) ? Federal award identification number: Not Applicable Criteria or specific requirement (including statutory, regulatory or other citation): Section 200 303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? The terms and conditions of the award requires the recipient to submit reports as the Secretary of the HHS determines are needed to ensure compliance with conditions that are imposed on the payment, and such reports shall be in such form, with such content, as specified by the Secretary of HHS in future program instructions directed to all recipients. Condition: In our Uniform Guidance grant compliance testing, we noted that a review by management of the Period 3 and Period 4 Provider Relief Fund (PRF) reports was not performed. In addition, the lost revenue calculations prepared by management were based on inaccurate data and limited to the amount of PRF funding received, which resulted in lost revenues attributable to Coronavirus being reported incorrectly in the HHS reporting portal (the Portal) for Period 3 and Period 4. This resulted in an understatement of lost revenue in the PRF Portal submissions. Cause: Management did not have sufficiently designed internal controls in place to ensure the calculations of lost revenues attributable to Coronavirus were prepared in accordance with the PRF requirements and free from error. Effect or potential effect: The calculations of lost revenues attributable to Coronavirus were reported incorrectly in the Portal for Period 3 and Period 4. Questioned costs: None. Context: During our testing of compliance attribute L: Reporting, we obtained the PRF Portal submissions for Period 3 and Period 4 and management's narrative on the selected lost revenue calculation method. We observed that management incorrectly capped the amount of lost revenue reported in the Portal at the amount of funding received for the respective Portal periods. We further observed that the supporting data entry workbook was using incorrect data totals. Total lost revenues submitted in the Portal were $25,799 and $1,520,543 for Period 3 and Period 4, respectively. Actual lost revenues to be submitted for Period 3 and Period 4 were $19,483,717 and $20,311,455, respectively. Lack of review of the PRF Portal submissions and the data entry workbook supporting them resulted in inaccurate lost revenues attributable to Coronavirus being reported in the Period 3 and Period 4 Portal submissions. The errors had no impact on meeting the requirements to retain the funding received as they resulted in understatements of lost revenues attributable to Coronavirus. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that management develop and implement effective internal controls to ensure accurate reporting in the Portal. Views of responsible officials: Management agrees with the finding. Management will develop internal controls to review and approve supporting documentation and calculations of lost revenues attributable to Coronavirus prior to future Portal submissions, where applicable. Management has contacted HRSA directly to inform them of the reporting errors and awaits next steps to address remediation as no Period 5 Portal submission is required. Management intends to revise their Period 3 and 4 lost revenue amounts to be in line with revised calculations.

Finding 2022-001 ? Reporting Internal control deficiency and noncompliance over the calculation of lost revenues attributable to Coronavirus Identification of the federal program: Assistance Listing Number 93.498 Program Name: COVID-19 ? Provider Relief Fund Grantor: Department of Health and Human Services (HHS) Federal award identification number: Not Applicable Views of responsible officials and planned corrective actions: Management agrees with the finding. Management will develop internal controls to review and approve supporting documentation and calculations of lost revenues attributable to Coronavirus prior to future Portal submissions, where applicable. The error noted understated lost revenues in the Portal submissions by approximately $38 million and, as a result, will not result in a refund of funds to HRSA. In future reporting periods, management will add an additional layer of review focused on the detailed calculations prior to Portal submissions, where applicable. All stages of review will be formally documented via sign-offs by the appropriate members of management before the lost revenues are entered into future reporting Portal submissions. Management has contacted HRSA directly to inform them of the reporting errors and awaits next steps to address remediation as no Period 5 Portal submission is required. Management intends to revise their Period 3 and 4 lost revenue amounts to be in line with revised calculations. Contact person: John Pohlman Expected Completion Date: September 30, 2023