Compass Memorial HealthcareLocal Government

Federal Program: Federal Financial Assistance Listing #93.498 US Department of Health and Human Services COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Criteria: The terms and conditions of the CARES Act Provider Relief Fund (PRF) distributions state that funds are not to be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the coronavirus pandemic, it was noted that mortgage interest expenses and insurance expenses were not reduced by amounts reimbursable from other sources, namely Medicare. Cause: Due to the amount of detailed information that was required to be compiled by management in order to enter data into the PRF reporting portal, management inadvertently included in eligible expenses certain costs that were not reduced by amounts reimbursable from Medicare. Effect: Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions. Questioned Costs: Total questioned costs related to CFDA #93.498 amounted to $325,891 ($244,705 related to mortgage interest expense and $81,186 related to insurance expense). Context: The PRF and HRSA guidance states that costs cannot be used to reimburse expenses or losses that have been or are obligated to be reimbursed by other sources. Certain interest and insurance expenses were identified as being included in the PRF reporting portal without being reduced by the portion reimbursable from Medicare. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in amounts expended and that the same expenses are not reimbursed by other sources. Views of Responsible Officials and Planned Corrective Action: Management agrees with the noted finding. However, the Hospital also incurred and reported significant unreimbursed expenses in the PRF reporting portal that if the noted questioned costs had not been reported, the Hospital would have satisfactorily incurred eligible expenses in excess of the PRF funds received, including interest earned on such funds. Management will continue to refine processes to more diligently review expenses to ensure that expenses are not being utilized for reimbursement from multiple sources.