LANTERN HILL, INC.

Finding 2021-001: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Reporting Cluster: Not applicable Federal Agency: Department of Health and Human Services (?HHS?) Award Name: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing #: 93.498 Assistance Listing Title: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution ? Period 1 and Period 2 Award Year(s): January 1, 2020 ? June 30, 2021 and January 1, 2020 ? December 31, 2021 Criteria Step Six of the Steps on Reporting on Use of Funds section of the June 11, 2021 Provider Relief Fund (?PRF?) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues to use one of the following three options for calculating lost revenues: ? Option (i): difference between actual patient care revenues and actuals for each quarter during the period of availability; ? Option (ii): difference between budgeted (budget approved prior to March 27, 2020) and actual patient care revenues for each quarter during the period of availability; or ? Option (iii): any reasonable method of estimating revenues Condition Through our testing of LHN?s period 1 and 2 HRSA reporting portal submissions, we identified discrepancies between the budgeted patient care revenue amounts input into the portal and the amounts approved by the Community?s board of directors on February 26, 2020 as part of the entity?s 5 year plan which support LHN?s lost revenue calculation. Cause The budget amounts used within the lost revenue calculations reported via the HSRA portal differed from the amounts approved by the board of directors due to minor adjustments made to the budget approved by the board. Effect Inputs into the lost revenue calculation were not complete and accurate and could have impacted the total lost revenue calculated by LHN. The amounts input incorrectly into the approved budgeted line did not have an impact on lost revenue that LHN could claim in the reporting period as LHN maintained sufficient capacity in amounts that qualified for use. The resulting total impact increased the lost revenue of LHN by $337K. Questioned Costs There are no questioned costs associated with this finding as the exceptions noted relate to an aspect of reporting which would have increased the potential qualifying funds of LHN. Recommendation Management should implement procedures to ensure that the lost revenue calculation used to report data into the HSRA portal is reconciled to the budget approved by the Board of Directors, inclusive of any minor adjustments made to the approved budget. Management?s Views and Corrective Action Plan Refer to Management?s Views and Corrective Action Plan at the end of this report.