APPLETON AREA HEALTHNon-Profit

Finding 2021-003 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, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Organization?s internal controls over compliance related to reporting of allowable costs was 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 health care related expenses or lost revenues that are attributable to coronavirus. Guidance provided for the Provider Relief Fund further states that Provider Relief Fund payments cannot be used to cover costs that are reimbursed from other sources or other sources are obligated to reimburse. Context: The Organization receives cost-based reimbursement from Medicare through the annually filed cost report. As a result, allowable costs reported needed to factor in and exclude any amounts that are reimbursed though the annual cost report. Cause: Changing guidance and interpretations as to what were considered allowable costs per the terms and conditions of the Provider Relief Fund program required constant monitoring guidance being posted to the Provider Relief Fund website. HRSA guidance provided via responses to frequently asked questions was modified as late as October 26, 2021. Effect: Based on the 2021 Medicare cost report reimbursing about 23% of the Organization?s total costs, auditor estimated that approximately $749,000 in reported expenses could potentially be reimbursed through the cost report. Since the Organization reported lost revenues of approximately $844,000 more than Provider Relief Fund reimbursement for lost revenues, there was sufficient remaining lost revenue to offset the overreporting of expenses that could be partially reimbursed through the cost report. Therefore, no funds were estimated to be due back to the Provider Relief Fund. Questioned costs: None. Recommendation: We recommend the Organization include in its controls over expenditures of federal awards the process of having an individual familiar with the award periodically review or monitor guidance that may be published by federal grantors. View of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.