Southern Illinois Healthcare Enterprises, Inc.Non-Profit

Criteria: In accordance with 2 CFR 200.302(b)(7) and 2 CFR 200.403, charges to federal awards must be supported, allowable, reasonable, and allocable to the applicable federal program. Payroll and benefit costs charged to federal awards should be calculated using accurate payroll information and reviewed to ensure amounts charged to federal awards are supported by underlying records and properly allocated. Condition: During testing of allowable costs for Major Program 93.912, we identified one instance in which payroll benefit costs charged to the federal award were overstated by $383 due to an error in the calculation of payroll-related benefits associated with an individual employee. Cause: Controls over the preparation and review of payroll benefit allocations charged to federal awards were not operating effectively, as the review process did not identify the calculation error. Effect or Potential Effect: As a result of the exception identified during audit testing, management performed additional procedures over the affected population and determined that an incorrect payroll benefit base had been used in calculating benefit allocations charged to federal awards for certain employees for which payroll and benefits are allocated to federal programs. Management identified unsupported payroll benefit costs and indirect costs charged to the following federal programs: Program 93.912 - $15,046; Program 93.387 - $1,901; and Program 93.889 - $29,718, for total questioned costs of $46,665. Management has indicated its intent to return these funds to the grantor agencies. Accordingly, the $46,665 of unsupported costs was removed from expenditures reported on the Schedule of Expenditures of Federal Awards, and no known questioned costs are reported in the Schedule of Findings and Questioned Costs. Questioned costs: $46,665 Repeat finding: No Recommendation: We recommend management strengthen controls over the preparation and review of payroll benefit allocations charged to federal awards. Review procedures should include verification of the payroll and benefit amounts used in the allocation calculations and reconciliation of allocated costs to supporting payroll records prior to charging amounts to federal awards. Management should also implement procedures to periodically monitor and validate allocation methodologies to prevent similar errors from occurring in future periods. View of responsible officials and planned corrective actions: Management agrees with the finding and recommendation. See the accompanying corrective action plan for management’s planned corrective actions.

Criteria: Provider Relief Fund (PFR) payments may be applied to lost revenues attributable to coronavirus according to the Period of Availability of funding. However, lost revenues may not be duplicated. Condition: In the report submitted to the Health Resources & Services Administration (HRSA) PRF Reporting Portal for reporting Period 1 for Southern Illinois Hospital Services (SIHS), the Corporation indicated that SIHS is the parent of Southern Illinois Medical Services (SIMS), and that SIHS is reporting on SIM's general distribution payments. The SIHS PRF report for Period 1 included the revenue from SIMS in the lost revenue calculations. SIMS also submitted a report to HRSA in the PRF portal for Period 1 targeted distributions under SIM's TIN. The SIMS lost revenue calculation included the same SIMS revenue that was reported by SIHS. Cause: The Corporation did not have adequate internal controls in place over monitoring of compliance with the HHS reporting requirements for the HRSA PFR Reporting Portal. Effect: SIMS revenue was included in the PRF Reporting Portal submission for both SIHS and SIMS for Period 1. SIMS revenue used in the SIMS period 1 portal submission lost revenue calculation should have been excluded from the SIHS Period 1 portal submission lost revenue calculation. Questioned Costs: None. Context: One of the two reports submitted to HRSA for Period 1 included duplicate SIMS revenue in the lost revenue calculation. Repeat finding?: No. Recommendation: We recommend management establish internal controls over the accuracy of the reports submitted to federal awarding agencies. View of responsible officials of the auditee: Management agrees with the finding and recommendation.