AMBERWELL ATCHISON ASSOCIATION D/B/A AMBERWELL ATCHISONNon-Profit

Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution - Reporting - Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 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. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 4 reporting required an organization to illustrate how PRF and ARP funds received were used. An organization was allowed to include eligible expenditures from January 1, 2020 through December 31, 2022 depending on the period reporting. Condition: During the process of identifying expenses that were incurred to prevent, prepare for, or respond to the coronavirus pandemic, management properly incurred and reported reflected expenses within the period of availability; however, the quarterly expenses reported on the portal submission did not reflect the actual quarter in which the expenses were incurred. Cause: Due to oversight by accounting and financial reporting personnel during the submission review process and the amount of detailed information that was required to be compiled by management to enter data into the PRF reporting portal, management inadvertently reported expenses incurred in incorrect quarters on the reporting portal submission; however, the expenses in total were appropriate. Effect: Management reported amounts in the PRF reporting portal in incorrect quarters, although the expenses were all incurred within the correct period of availability. Questioned Costs: None reported. This error is a deficiency in the Organization?s internal control over the review of the portal submission.

Identification of the Federal Program: Federal Assistance Listing Number 93.498 US Department of Health and Human Services COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 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. The Health Resources and Services Administration (HRSA) provided guidance on how an organization was to report usage of PRF distributions received. Period 1 and Period 2 reporting required an organization to illustrate how PRF funds received were used. An organization was allowed to include eligible expenditures from January 1, 2020 through December 31, 2021 depending on the period reporting. Condition: During the process of identifying expenses that were incurred to prevent, prepare for, or respond to the coronavirus pandemic, management included expenses incurred in January 2020 and February 2020 which were not supported by management in relation to prepare, prevent, or respond to coronavirus as these were incurred prior to when the Organization began to prepare for coronavirus. Cause: The Organization?s internal control policy did not ensure that eligible expenses followed applicable reporting guidance. 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 amounts unrelated to prepare, prevent, and responding to the coronavirus which occurred during the months of January 2020 and February 2020. Effect: Management included amounts in the PRF reporting portal of $408,190 for January 2020 and February 2020 expenditures which were not eligible based on the terms and conditions of the PRF distributions and subsequent HRSA guidance. Questioned Costs: None reported. The total amount reported that should have been excluded was $408,190 related to costs that were incurred from January 2020 and February 2020. This error did not result in any questioned costs as the Organization incurred and reported additional expenses on the Total Unreimbursed Expenses Attributable to Coronavirus line item, which based on testing, resulted in sufficient expenses incurred attributable to coronavirus. As a result, there were no questioned costs. Context: A nonstatistical sample of 40 expenditures were selected for testing in which there were four errors identified for expenditures prior to when the entity began to prepare for, prevent, and respond to the coronavirus. We then used the client listing to determine the total amount of expenses reported from January 2020 and February 2020 was $408,190. The Organization then identified the eligible expenses from the Total Unreimbursed Expenses Attributable to Coronavirus line item and additional items were selected for testing from this population. 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 reporting periods defined by HRSA. Views of Responsible Officials: Management agrees with the noted finding. However, the Organization also incurred and reported unreimbursed expenses attributable to coronavirus of $2,736,111 which could be used to replace the identified January 2020 and February 2020 costs unrelated to coronavirus. Management will continue to refine its processes to more diligently review expenditures to ensure only those costs incurred during the eligibility period are included in future reporting.