KALKASKA COUNTY HOSPITAL AUTHORITYLocal Government

Finding 2021-001 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Internal Control Over Compliance Significant Deficiency Condition: The Organization?s internal controls over compliance related to cash disbursements of costs incurred for capital related projects were not effective. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to coronavirus during the period of availability. Context: During the audit, it was determined that costs for expenditures that related to a construction project that was not fully complete as of June 30, 2021, which was the end of the period of availability were included in Provider Relief Fund Reporting Period I reporting submission as allowable cost. Based on the frequently asked questions (?FAQs?), released by the Department of Health and Human Services (?HHS?) in August 2021, these costs were not an allowable COVID expense to be included under the period of availability as the project was not complete prior to the end of the period of availability. Cause: Management made a determination as of June 30, 2021 but FAQs were released after that date which provided clarity these costs are not allowable in this period of availability. Effect: The Organization?s internal controls regarding compliance with the terms and conditions in the frequently asked questions published by HHS were not effective. Recommendation: We recommend that management review all invoices for allowability under the criteria provided by HHS and report costs associated to capital related projects as a result of COVID in the period of availability when the project is complete and placed into service. View of Responsible Management will review all invoices to determine allowability under the specific Officials: grant?s rules and regulations. It is management?s viewpoint that the determination to include these costs in the reporting portal was made prior to the FAQs published in August 2021. For PRF Reporting Period I, the Hospital has enough excess lost revenue to cover the disbursements noted above and retain the grant funding. Furthermore, these costs can be considered an allowable expense in a future period of availability as they are related to COVID.

Finding 2021-002 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance Compliance Requirement: Allowable Costs Condition: The Organization 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 healthcare related expenses or lost revenues that are attributable to coronavirus during the period of availability. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for healthcare related expenses or lost revenues that are attributable to coronavirus during the period of availability. Context: During the audit, it was determined that costs of $263,381 tested were for expenditures that related to a construction project that was not fully complete as of June 30, 2021, which was the end of the period of availability. Based on the frequently asked questions released in August 2021 by the Department of Health and Human Services these costs were not an allowable COVID expense to be included under the period of availability as the project was not complete prior to the end of the period of availability. Cause: Management made a determination as of June 30, 2021 but FAQs were released after that date which provided clarity these costs are not allowable in this period of availability. Effect: The Organization is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Recommendation: We recommend that management review all invoices for allowability under the criteria provided by HHS and report costs associated to capital related projects as a result of COVID in the period of availability when the project is complete and placed into service. View of Responsible Management will review all invoices to determine allowability under the specific Officials: grant?s rules and regulations. It is management?s viewpoint that the determination to include these costs in the reporting portal was made prior to the FAQs published in August 2021. For Period I the Hospital has enough excess lost revenue to cover the disbursements noted above and retain the grant funding. Furthermore, these costs can be considered an allowable expense in a future period of availability as they are related to COVID.