Crossing Rivers HealthNon-Profit

2021-003 Department of Health and Human ServicesCFDA #93.498COVID-19 Provider Relief FundApplicable Federal Award Number and Year ? Period 1 TIN #390926284Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesMaterial Weakness in Internal Control Over Compliance and NoncomplianceReportingMaterial Weakness in Internal Control Over Compliance and Material NoncomplianceCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Health Center selected option ii to calculate lost revenue which consists of a comparison of actual results during the period of availability to the approved budget.Condition: The Health Center excluded bad debt and charity care from the amounts reported for lost revenue for both the actual and budgeted amounts. In addition, the budget used in the calculation of lost revenue in quarter 1 and 2 of 2021 was not approved prior to March 27, 2020. The Health Center?s lost revenue claimed under the Provider Relief Fund program as an allowable cost was not reviewed and approved by a separate individual outside of the preparer. In addition, there was no evidence retained that Crossing Rivers Health?s special report submitted to the Department of Health and Human Services for Period 1 TIN #390926284 was reviewed and approved by a separate individual outside of the preparer.Cause: The Health Center did not have an internal control process in place to ensure review and approval of the lost revenue calculation claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 1 was documented. The reporting portal input fields did not have a specific box for bad debt and charity care and it was not netted with self-pay revenue. The Health Center did have an approved budget prior to March 27, 2020 for calendar year 2020, but the approved budget did not cover the entire period of availability.Effect: The lost revenue reported was $397,538 for quarter 1 2021 without a budget approved prior to March 27, 2020. Had the Health Center included bad debt and charity care in the lost revenue calculation during the period of availability, the lost revenue would have been $6,508,263 rather than the $4,911,473. The Health Center would not have had to return the $304,585 of funds as reported in Period 1. Without documentation of a secondary review and approval, demonstrating internal controls over compliance is difficult.Questioned Costs: None reported. Had the Health Center elected to use option iii to calculate lost revenue, the modifications to the lost revenue made by the Health Center to exclude bad debt and charity care due to the challenges related to budgeting these items could have been supported and permitted, and the use of the budget to actual comparison for quarter 1 and 2 for 2021, which was approved by November 2020 could have been supported and permitted.Context/Sampling: Key line items were tested on the Period 1 Department of Health and Human Services special report.Repeat Finding from Prior Years: NoRecommendation: We recommend the Health Center implement a control process which includes a documented secondary review and approval of the loss revenue calculation used to support the allowable costs and the required reports to be submitted to the federal agency.Views of Responsible Officials: Management agrees with the finding. We used our best interpretation of the available information and guidance at the time of calculation and submission.