Phoebe Devitt HomesNon-Profit

2022-001 - Significant Deficiency in Internal Control - Review and Approval of Allowable Costs Federal Program: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: N/A Award Number: N/A Award Year: 2020 and 2021 Compliance Requirement: Allowable Cost/Cost Principles and Activities Allowed or Unallowed Questioned Costs: None noted Criteria: Nonfederal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: During the testing of expenditures related to increased nurse agency costs and benefits allocation calculations, we observed that for 2 of the 2 calculations tested did not contain a review and approval prior to submission to detect potential errors in the calculations. Effect: The Corporation lacks proper documentation of review with respect to the calculations of increased nurse agency costs and benefits allocations, which could result in errors in these calculations. As a result of the lack of proper documentation of review, noncompliance due to error or fraud could occur without being detected and corrected timely. Cause: The Corporation lacks a formal review policy related to the calculations of increased nurse agency costs and benefits allocations. Recommendation: Management should implement and document a review process for these calculations. View of Responsible Officials: Beginning with reporting period 4, the Organization will begin formally documenting the review of all calculations as part of the submission review process.

Assistance Listing Number: 93.498 - COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Not Applicable Award Number / Year: Not applicable / 2021 Questioned Costs: N/A Criteria: All recipients of Provider Relief Fund (PRF) payments must comply with the Revenue Reporting Guide and the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services (collectively, the Guidance). PRF payment amounts not fully expended on health care-related expenses attributable to coronavirus may be applied to patient care lost revenues, if applicable. Recipients may choose to apply PRF payments toward lost revenues using one of three options: Option i: of the difference between actual patient care revenues; Option ii: of the difference between budgeted and actual patient care revenues, or Option iii: calculated by any reasonable method of estimating revenues. Condition and Context: The Organization selected option i. to account for their lost revenue used to apply towards their PRF payments. In the Organization's reporting submissions, they only included lost revenues from skilled nursing and personal care services and erroneously excluded from their lost revenues amounts attributable to independent living services provided to residents. This was observed for the period one reports submitted. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance (the Guidance). Cause: Management incorrectly interpreted the Guidance to exclude independent living revenue as it was not impacted by the COVID-19 pandemic. Recommendation: We recommend that management review their process and procedures to ensure that lost revenues are calculated in accordance with U.S. Department of Health and Human Services reporting guidance. View of Responsible Officials: Management intended to select option iii as a result of excluding revenues that were generally not negatively impacted by the COVID-19 pandemic (independent living related service revenues). Management will select option iii on future HRSA PRF Reporting Portal submissions.