FRANCISCAN SISTERS OF CHRISTIAN CHARITY SPONSORED MINISTRIES, INC.Non-Profit

Assistance Listing Number, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services (HHS), COVID 19 Provider Relief Fund Federal Award Identification Number and Year N/A 2021 Pass through Entity N/A direct funded Finding Type Material weakness and material noncompliance with laws and regulations Criteria In order to comply with program rules, non federal entities must establish and maintain effective internal controls over the federal award, as described in 2 CFR 200.303(a). For Provider Relief Funding, the terms and conditions of the grant, according to HHS, require that the Corporation report certain information accurately into the HHS portal in order to attest to the utilization of the funding received. Specifically, the HHS June 11, 2021 post payment reporting notice has specific information on the net patient service revenue (NPSR) amounts to be reported. These amounts are either to be reported in annual aggregate totals, or quarterly, using one of three options. Condition The Corporation did not follow the reporting requirements as outlined in the HHS June 11, 2021 post payment reporting notice. The Corporation's controls in place were not adequate to prevent the entry of incorrect net patient service revenue (NPSR) annual and quarterly totals for some of the Corporation's affiliates, as required by HHS. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Refer to context below for additional information. Context The single audit for the Corporation comprises 4 entities, Holy Family Memorial (HFM), Fransican Care Services (FCS), St. Paul Elder Services (SPES) and St. Joseph Elder Services. For these four entities, there were a total of 6 portal submissions during the period under audit. There were two portal submissions (Period 1 and Period 2) required and submitted for SPES and SJES, and one portal submission (Period 1) required and submitted for HFM and FCS. The portal submission for HFM included incorrect quarterly revenue information. The actual amount of NPSR reported for HFM reported in the portal submission for the first and second quarter of 2021 was overstated by $2,151,541 and $3,774,656, respectively, causing HFM to underreport lost revenue by $5,926,197. In addition, the HHS June 11, 2021 post payment reporting notice requires entities that are not required to enter quarterly lost revenue amounts to support the provider relief funds earned to report annual totals for NPSR for certain calendar years. The amounts required to be reported for the Period 1 submission are NPSR totals for calendar year 2019 and calendar year 2020. The amounts required to be reported for the Period 2 submission are NPSR totals for calendar year 2019, calendar year 2020 and calendar year 2021. This information is not factored into the calculation of provider relief funding earned by the entity reporting the information. The information entered for SPES total NPSR for calendar year 2019 and calendar year 2020 in SPES's Period 1 portal submission were not accurate. The amounts were understated by $176,147 and $2,525,495, respectively. Additionally, for the Period 2 portal submission for SPES, the NPSR for calendar year 2019 and calendar year 2021 were not accurate. The amounts for calendar year 2019 were understated by $255,688 and the amounts for calendar year 2021 were overstated by $2,198. Cause and Effect The Corporation's procedures and controls did not prevent the entry of inaccurate NPSR amounts from being entered into the HHS portal. As a result of the incorrect information being entered, the Corporation has under reported the amount of lost revenue it has incurred during the period of allowability for the Period 1 portal submission. Additionally, total SPES NPSR for the calendar years noted in the context are not accurately stated. Recommendation We recommend the Corporation implement controls, including levels of review, to ensure that the information submitted into the HHS portal is accurate. Views of Responsible Officials and Corrective Action Plan The Corporation will review the processes surrounding HHS portal submission to ensure the appropriate levels of review and reconciliation are in place to prevent the issue from recurring.

Assistance Listing Number, Federal Agency, and Program Name 93.498, U.S. Department of Health and Human Services (HHS), COVID 19 Provider Relief Fund Federal Award Identification Number and Year N/A 2021 Pass through Entity N/A direct funded Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per the Provider Relief Fund General and Targeted Distribution Post Payment Notice of Reporting Requirements dated June 11, 2021, recipients may choose to apply PRF payments towards lost revenues using one of three options, up to the amount: Option i: of the difference between actual patient care revenues; Option ii: of the difference between budgeted (prior to March 27, 2020) and actual patient care revenues; or Option iii: calculated by any reasonable methodology of estimating revenues. Condition The Corporation's controls in place for reporting submissions did not identify that Post Payment Notice of Reporting Requirements guidelines were not followed related to the lost revenue calculations. The Holy Family Memorial (HFM) Period 1 reporting submission and the Period 1 and Period 2 reporting submissions for St. Joseph Elder Services (SJES) for lost revenue did not follow the acceptable options provided by the HHS. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Refer to context below for additional information. Context The single audit for the Corporation comprises 4 entities, Holy Family Memorial (HFM), Fransican Care Services (FCS), St. Paul Elder Services (SPES) and St. Joseph Elder Services. For these four entities, there were a total of 6 portal submissions during the period under audit. There were two portal submissions (Period 1 and Period 2) required and submitted for SPES, and SJES, and one portal submission (Period 1) required and submitted for HFM and FCS. The HFM Period 1 reporting submission and the Period 1 and Period 2 reporting submissions for SJES for lost revenue did not follow the acceptable options provided by the HHS, as noted in the criteria, above. HFM and SJES had reported to HHS that they used option ii to calculate their their lost revenue included in their portal submissions. However, the budgeted amounts for patient care revenue relating to the periods in calendar year 2021 were not approved prior to March 27, 2020, therefore, option ii was not allowable. The Corporation should have selected option iii in its portal submissions. Finally, by not selecting option iii in the HFM and SJES portal submissions, HFM and SJES omitted required information related to the reason for selecting option iii in their submissions. Cause and Effect Appropriate review of the reporting submissions was not completed to ensure the reports followed required guidelines. As a result, the Corporation submitted incorrect reports, attesting to using an incorrect methodology for reporting lost revenues. Additionally, because the Corporation attested to using option ii, they did not provide the additional information to HHS that would have been required if option iii would have been selected correctly. This additional information includes an explanation for the reason the Corporation used option iii for reporting lost revenue. Recommendation We recommend that the Corporation implement controls, including levels of review, to ensure that reports are completed and submitted in accordance with the guidelines established by HHS. Views of Responsible Officials and Planned Corrective Actions The Corporation will review its processes surrounding the methodologies used to report lost revenue and will implement additional levels of review to ensure that the proper lost revenue methodology is used in future reporting periods.