The Guthrie Clinic

Finding 2023-001 - Significant Deficiency in Internal Control – Activities Allowed or Unallowed, and Allowable Costs/Cost Principles Assistance Listing No.: 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: Not applicable Award Year: 2021/2022 Questioned Costs: None reported Criteria: Non-federal 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. Condition/Context: The Corporation’s review process failed to detect errors in the calculation of amounts related to the pay for event program that were applied to the Federal award. Errors were discovered in 8 of the 44 items tested for the pay for event program which would have increased the allowable costs eligible for reimbursement under the Federal award by $671. This is not a statistically valid sample. Effect: Expenses applied to the Federal award were not impacted as the errors would have increased the allowable costs eligible for reimbursement. Internal controls related to the review of calculations under the pay for event program were not effective in identifying errors prior to reporting. Cause: An oversight by management during the review process that failed to identify the error in underlying support for pay for event calculations. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding. Management implemented an enhanced review process to validate all amounts reported on the PRF Reporting Portal submission, and to ensure compliance with existing policies and terms and conditions of the Provider Relief Funds. Further action was not considered necessary as the errors would result in increased costs eligible for reimbursement under the Federal award and no further funding is available.

Finding 2023-002 - Significant Deficiency in Internal Control – Reporting Assistance Listing No.: 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: Not applicable Award Year: 2021 Questioned Costs: None reported Criteria: Non-federal 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. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with 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. Condition/Context: The Corporation used the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3) for measuring lost revenues. In the Corporation's Period 4 submission for Robert Packer Hospital, TIN 24-0795463, total lost revenues were incorrectly reported as $13,011,879, rather than $12,930,176. Total lost revenues available to be used in this reporting period based on the adjusted amount was $7,142,168 on payments in the period of $7,142,168. This is not a statistically valid sample. Effect: Lost revenue reported to Health Resources and Services Administration (HRSA) were overstated by $81,803. After correcting for this error, available lost revenues were equal to the payments received for the period of $7,142,768. Cause: An oversight by management during the review process that failed to identify the error in the reporting of lost revenues. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding. Management increased the level of review over the lost revenue calculations for future reporting periods. Management did not believe that further corrections to the Period 4 report were necessary as the remaining available lost revenues after adjusting for the error were equal to the payments received in the period and there was no further submissions necessary for Robert Parker Hospital.

Finding 2022-001 - Significant Deficiency in Internal Control ? Reporting Repeat Finding 2021-001 Assistance Listing No.: 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: Not applicable Award Year: 2021 Compliance Requirement: Reporting Questioned Costs: None reported Criteria: Non-federal 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. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with 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. Condition/Context: In the Corporation's Period 2 submissions, using the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3), the lost revenues for quarter 4 of 2020 were incorrectly reported as $0 (rather than $4,934,624) and the lost revenues for quarter 1 of 2021 were incorrectly reported as $4,934,624 (rather than $0). This is not a statistically valid sample. Effect: Lost revenue reported to Health Resources and Services Administration (HRSA) for quarter 1 of 2021 should have been input as lost revenue for quarter 4 of 2020. Total lost revenues reported for Period 1 were not impacted by the amounts being incorrectly input into the wrong quarter because both quarters are within Reporting Period 2. Cause: An oversight by management during the review process that failed to identify the error in the reporting of lost revenues. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding and has implemented additional internal controls through independent review and sign off of the draft PRF reporting, prior to final submission, to ensure completeness and accuracy. The Corporation rectified the reporting error in its Period 3 submissions.

Finding 2021-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing No.: 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: Not applicable Award Year: 2020 Compliance Requirement: Reporting Questioned Costs: None reported. Criteria: Non-federal 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. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with 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. Condition/Context: In the Corporation?s Period 1 submissions, using the Lost Revenues Reporting Method: Alternative Reasonable Methodology (Option 3), the lost revenues for quarter 4 of 2020 were incorrectly reported as $0 (rather than $4,934,624) and the lost revenues for quarter 1 of 2021 were incorrectly reported as $4,934,624 (rather than $0). Effect: Lost revenue reported to Health Resources and Services Administration (HRSA) for quarter 1 of 2021 should have been input as lost revenue for quarter 4 of 2020. Total lost revenues reported for Period 1 were not impacted by the amounts being incorrectly input into the wrong quarter because both quarters are within Reporting Period 1. Cause: An oversight by management during the review process that failed to identify the error in the reporting of lost revenues. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Corporation agrees with the finding and has implemented additional internal controls through independent review and sign off of the draft PRF reporting, prior to final submission, to ensure completeness and accuracy.

Finding 2021-002 - Significant Deficiency in Internal Control - Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Assistance Listing No.: 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: Not applicable Award Year: 2020 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Questioned Costs: $2,555 Criteria: Non-federal 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. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with 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. PRF payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the U.S. Department of Health and Human Services. Activities allowed have been defined as expense used to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. Condition/Context: During our testing, we noted that 7 out of 40 disbursements tested had errors in the amount charged to the program due to improper pay rates being utilized for certain employees. This was not a statistically valid sample. Effect: As a result of the error, $2,555 of unallowable expenses for quarantine pay was allocated to the federal program. Additionally, these expenses were included in the PRF reporting that was submitted to Health Resources & Services Administration (HRSA). Therefore, amounts reported to HRSA were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: Management used improper pay rates when calculating quarantine pay for certain employees. Recommendation: We recommend that management review the procedures for filing their required reporting to ensure that proper pay rate information is used when determining payroll costs allocated to the program. We also recommend that these reports are reviewed by an independent reviewer that signs and dates for evidence of the review. Views of Responsible Officials: The Corporation agrees with the finding and has updated the internal control process of oversight of allowable costs by obtaining approved, actual pay rates from Human Resources for any staff charged against the program, Prior to submission of this information, an independent review will be performed and evidenced by sign off.