Southwest Health Center, Inc.

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, Significant Deficiency Compliance Requirement: Allowable Costs Condition: Southwest Health Center and Subsidiaries 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 health care related expenses or lost revenues that are attributable to coronavirus. 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 health care related expenses or lost revenues that are attributable to coronavirus. Context: During the audit, it was determined that there were a number of expenditures claimed as allowable COVID-19 expenses on the submission of expenses to the Health Resources and Services Agency (HRSA) without deducting for cost-reimbursement received from the Medicare program for the same items. The full amount of these expenditures are not an allowable COVID-19 expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds until after other applicable payor sources, such as Medicare program cost-reimbursement for being a Critical Access Hospital and Rural Health Clinic are accounted for. In addition, there are a minor amount of expenses with the submission of allowable expenses to HRSA which were included in duplicate or non-allowable based on other terms and conditions of the U.S. Department of Health and Human Services Provider Relief Funds. However, in review of all of these findings in the aggregate, it was noted that there was more than adequate amounts of lost revenue which could have been used in place of these expense items. The net of all of these items would have resulted in no recoupment by HRSA related to allowable COVID-19 expenses, but the reporting categories and tracking by management should be updated. Cause: Management oversight. Effect: Southwest Health Center is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Recommendation: We recommend that management review all the submitted expenses and lost revenue amounts for allowability under the criteria provided by the U.S. Department of Health and Human Services, and update its internal HRSA reporting as this may impact the ability to claim future expenses and/or lost revenues related to future Provider Relief Fund amounts received. View of Responsible Officials: Management will work to update its documentation as well as update its internal records to reflect allowable costs under the program. Management will also develop a more detailed expense log and review those against current terms and conditions prior to any future portal submissions.

Management of the organization will work with HRSA to update its documentation as well as update its internal records to reflect allowable lost revenues under the program. Although in 2021, the updates to allowable expenditures did not result in any change in amounts allowable for funding by the Provider Relief Funds, this change may impact future calculations. Southwest Health Center?s accounting staff will review these necessary changes and ensure that amounts are updated for use on the next Provider Relief Fund reporting due in early calendar year 2023. These steps will help to ensure that no amounts of lost revenue or allowable expenditures by Southwest Health Center are not reported in two reporting periods or claimed twice.