Kimball County Hospital d/b/a Kimball Health Services

Item 2021-002 Identification of the Federal Program: Provider Relief Fund Federal Assistance Listing Number 93.498 US Department of Health and Human Serivces Criteria or Specific Requirement: If interest earned on Provider Relief Fund awards that the Reporting Entity expended in full, the interest amounts may be retained and applied toward a reportable use of funds. Provider Relief Fund payments received and retained are reportable, as is any interest earned on those payments. Condition: The Hospital incorrectly calculated estimated interest earned on Provider Relief Fund payments received. Questioned Costs: $124,470 Cause: Management applied the annual percentage yield on the interest-bearing account on a monthly basis, which resulted in a miscalculation of estimated interest earned on Provider Relief Fund payments received. Effect: Amounts reported as gross Provider Relief Fund payments received, including interest earned, were overstated. This also overstated the Provider Relief Fund expenditures included in the schedule of expenditures of Federal awards. Context: Upon receipt, Provider Relief Funds were deposited into two separate bank accounts, both interest bearing accounts. In calculating the estimated interest earned on the funds over the reporting period, the annual percentage yield was inadvertently applied to the funds on a monthly basis, rather than an annual basis. Recommendation: We recommend the Hospital contact HRSA to determine if a revision to the HRSA Reporting Portal submission can be made to correct this error. Views of Responsible Officials: Management concurs with the finding and will work with HRSA on an appropriate course of action. See Corrective Action Plan.

Item 2021-003 Identification of the Federal Program: Provider Relief Fund Federal Assistance Listing Number 93.498 US Department of Health and Human Services Criteria or Specific Requirement: 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. Condition: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the coronavirus pandemic, management overstated expenses claimed for reimbursement. Questioned Costs: $144,200 Cause: Insurance premiums paid for the 4th quarter of 2020 were miskeyed into management?s spreadsheet used for tracking Provider Relief Fund expenses resulting in an overstatement of amounts reported. Effect: Management included amounts in the Provider Relief Fund reporting portal which could not be substantiated with adequate documentation as required by the terms and conditions of the Provider Relief Fund distributions and related guidance issued by HRSA. Context: The Provider Relief Fund and HRSA guidance indicate that Reporting Entities are required to maintain adequate documentation to substantiate that the funds were used for healthcare related expenses or lost revenues. An oversight by management in the maintenance of tracking Provider Relief Fund expenses resulted in an overstatement. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that all costs reported can be substantiated with adequate documentation . Views of Responsible Officials: Management agrees with the noted finding and will continue to refine processes to more diligently review allowable costs to ensure only those costs can be properly substantiated. However, given the Hospital overstated Provider Relief Fund payments as noted in Item 2021-002 above, and that the Hospital also incurred and reported unreimbursed expenses attributable to the coronavirus in the Provider Relief Fund reporting portal, it appears the Hospital would have satisfactorily incurred eligible expenses and lost revenue in excess of the Provider Relief Funds received, including interest earned on such funds. See Corrective Action Plan.