BUENA VISTA REGIONAL MEDICAL CENTER

Finding No. 2021-001 Federal Program: CFDA #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 to only be used to prevent, prepare for and respond to coronavirus, and that funds may only be used for healthcare related expenses or lost revenue that is attributable to the coronavirus. Subsequent guidance issued by the Health Resources and Services Administration (HRSA) states that expenses must be net of other reimbursement sources and that pay rates in excess of Executive Level II are not eligible. Condition: During the process of testing claimed pandemic related healthcare expenses, it was noted that one interest payment was not reduced for the impact of Medicare cost-based reimbursement and wage rates in excess of Executive Level II were claimed. Cause: Due to the amount of detailed information that was required to be compiled by management to enter data into the PRF reporting portal, management had a formula error in its calculation to reduce expenses by Medicare cost-based reimbursement. The inclusion of wage rates in excess of Executive Level II was an oversite. Effect: Management included amounts in the PRF reporting portal which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: Total questioned costs related to CFDA #93.498 amounted to $143,330 ($96,843 related to wage rates in excess of Executive Level II, $36,084 in employee benefits assigned to wage rates in excess of Executive Level II, and $10,403 in interest expense not reduced for Medicare cost-based reimbursement). Context: Wage rates in excess of Executive Level II were claimed by the Hospital in Q2 (2020) and Q4 (2020). Employee benefits associated with wage rates in excess of Executive Level II were erroneously included in the same two quarters. Interest expense that was not reduced for Medicare cost-based reimbursement was claimed in Q2 (2020). The PRF and HRSA guidance states that expenses must be net of other reimbursement sources and that pay rates in excess of Executive Level II are not eligible. 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. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding summarized above. However, management notes that unreimbursed expenses were claimed during the reporting period in excess of the questioned costs identified above. As a result, had the questioned costs noted above not been included in the PRF submission, there would be no change in the amount of PRF expended by the Hospital during the reporting period.