COASTAL HOSPICE, INC.Non-Profit

2021-002 ? Allowable Costs and Activities Federal agency: U.S. Department of Health and Human Services Federal program title: Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Reporting Period 1 for Funds Received Prior to June 30, 2020, Used through June 30, 2021 Type of Finding: ? Significant Deficiency in Internal Control Criteria or specific requirement: 2 CFR 200.303(a) established 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 Hospice did not have documented formal controls and procedures over compliance with federal awards. Condition: The Hospice did not have documented formal review processes over the use of the federal awards. Eligible uses of federal awards were tracked in detail and reviewed, with formal approval documented, but there was not a formal documented review process over whether expenditures were eligible under the federal award. Questioned Costs: None Context: The Hospice maintained detailed records of eligible uses of federal funds for tracking and required reporting purposes. There was not, however, documentation of a formal review or approval for compliance. The Hospice does have in place review processes and controls over all expenditures, they are just not designed specifically to consider compliance with federal programs. Cause: The Hospice has not previously received federal awards in an amount sufficient to require an audit under Uniform Guidance. Therefore, more formal controls and procedures around the use of federal awards had not been in place. The Provider Relief Fund amounts received in response to the COVID-19 pandemic were an unexpected occurrence. As the relief funds were distributed to the Hospice, the focus of Hospice?s management and governance was on responding to the pandemic, and tracking use of related relief funds, and not necessarily on incorporating formal policies and procedures due to the time sensitive nature of the pandemic. In addition, detailed guidance surrounding the Provider Relief Fund was not immediately available, and changed quite frequently over the period of performance, making it difficult for organizations to properly incorporate more formal policies and procedures. Effect: Without formal control and review processes in place over use of federal funds or required reporting under those awards, there is a greater risk of improper use of funds or misstatement in required reporting. Recommendation: We recommend that management put in place a more formal control process surrounding the use of federal awards where there is segregation between individuals identifying or proposing expenditures/uses of funds and an individual reviewing and approving that expenditure/use. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 - Reporting Federal agency: U.S. Department of Health and Human Services Federal program title: Provider Relief Fund Assistance Listing Number: 93.498 Award Period: Reporting Period 1 for Funds Received Prior to June 30, 2020, Used through June 30, 2021 Type of Finding: ? Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: 2 CFR 200.303(a) established 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 Hospice did not have documented formal controls and procedures over compliance with federal awards. Condition: Required reporting under the federal award was completed, but there was not a formal review or approval process in place. In addition, the Hospice reported lost revenues that were incorrectly calculated. Questioned Costs: None Context: The Hospice completed the required reporting under the federal award based on the records discussed in finding 2021-002, a lost revenue calculation, and other supporting documentation, but there was no formal review or approval process for that report. Cause: The Hospice has not previously received federal awards in an amount sufficient to require an audit under Uniform Guidance. Therefore, more formal controls and procedures around the use of federal awards had not been in place. The Provider Relief Fund amounts received in response to the COVID-19 pandemic were an unexpected occurrence. As the relief funds were distributed to the Hospice, the focus of Hospice?s management and governance was on responding to the pandemic, and tracking use of related relief funds, and not necessarily on incorporating formal policies and procedures due to the time sensitive nature of the pandemic. In addition, detailed guidance surrounding the Provider Relief Fund was not immediately available, and changed quite frequently over the period of performance, making it difficult for organizations to properly incorporate more formal policies and procedures. Effect: Without formal control and review processes in place over use of federal funds or required reporting under those awards, there is a greater risk of improper use of funds or misstatement in required reporting. Recommendation: We recommend for any formal reporting required under federal awards that there be a formal review process where an individual is reviewing and approving the report who did not prepare the report. Documentation of the review and approval should be retained in both cases. Views of responsible officials: There is no disagreement with the audit finding.