Midwest Medical Foundation

Segregation of duties provides stronger internal controls by not allowing one person to have control and responsibility over a complete accounting system (cash receipts, cash disbursements, payroll and purchasing, receiving, and accounts payable). It was noted that certain individuals in Midwest Medical Foundation and Affiliate have significant responsibilities or access within the information systems to many of the financial accounting cycles such as accounts payable, payroll, financial accounting, and reporting, which creates a concern over segregation of duties. Due to the small staff size in the accounting departments, particularly noted within information systems access in registration and in purchasing and receiving functions, a lack of segregation of duties exists.

Midwest Medical Foundation and Affiliate has added an additional accounting position who will assist in many of the areas and create additional segregation of duties to some areas in the future, and access within the information systems and purchasing functions will also be reviewed in the upcoming fiscal year. The Board of Directors and management are aware of incompatible duties and will continue to provide oversight and monitor Midwest Medical Foundation and Affiliate's operations.

Midwest Medical Foundation and Affiliate did not meet its requirements to use the funds to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. During the audit, it was determined that there were a number of expenditures claimed as allowance COVID expenses without deducting for cost?reimbursement received from the Medicare program for items used in operations and also included on the submission of expenses to the Health Resources and Services Agency (HRSA). The full amount of these expenditures are not an allowable COVID expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds until after other applicable payor sources, such as Medicare program cost?reimbursement for being a Critical Access Hospital and Rural Health Clinic are accounted for. In addition, there are a number of expenses with the submission of allowable expenses to HRSA which were not newly incurred items which were only attributable to the COVID pandemic or a cause to incurred for the COVID pandemic, including employee benefit costs which were previously paid for by the organization. These are also not an allowable COVID expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds. It was also noted during the audit that no interest income was included for funds not expended or until the point expended as a reported item within the submission of expenses to HRSA. However, in review of these items, it was noted that amount of lost revenue which would have been applicable in calendar year 2020 compared to calendar 2019 was not properly reported in the portal for quarters which contained lost revenue. The net of all of these items would have resulted in no recoupment by HRSA related to allowable COVID expenses, but the reporting categories and tracking by management should be updated.

Management will work with HRSA to update its documentation as well as update its internal records to reflect allowable costs under the program. Management will also develop a more detailed expense log and review those against current terms and conditions prior to any future portal submissions.