Adventist Healthcare, Inc. and Controlled Entities

Finding 2021-001 - Significant Deficiency in Internal Control - Reporting Assistance Listing No: 93.498 - COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Passed-Through Agency: Not applicable Award Number: Not applicable Award Year: 2020 Compliance Requirement: Reporting Questioned Costs: Not determinable Criteria: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution payment amounts not fully expended on health care-related expenses attributable to coronavirus may be applied to patient care lost revenues, if applicable. Recipients may choose to apply PRF payments toward lost revenues using one of three options: Option i: of the difference between actual patient care revenues; Option ii: of the difference between budgeted and actual patient care revenues; Option iii: calculated by any reasonable method of estimating revenues. Condition and Context: In the Corporation's Period 1 reporting submissions, the Corporation incorrectly reported lost revenues under Option ii rather than Option iii. Option ii would not be appropriate due to the 2020 Budget did not cover the entire period of availability ending June 30, 2021. Therefore, the Corporation should have selected Option iii and the methodology was to use budget to actual patient revenues utilizing the 2020 budget that was approved prior to March 27, 2020 as the base year. The Corporation submitted one report for each of the periods of availability which ended in the year ending December 31, 2021 (i.e., Period 1 and Period 2) which were both tested. This is not a statistically valid sample. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: The Corporation did not properly interpret the guidance for reporting that was available at the time. Additional guidance has since been issued to clarify the reporting requirements. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. View of Responsible Officials: The Corporation agrees with the finding. The instructions for Option ii for the Period 1 reporting submission were not clear. The instructions indicated we could use "2020/2021 budgeted and 2020/2021 actual patient care revenue" as long as the budget was "approved before March 27, 2020". The Corporation believed it met this requirement and used Option ii. After the Period 1 reporting submission, HRSA issued further guidance clarifying the use of Option ii. Upon reading that guidance, management concluded that they should have used Option iii. The Corporation corrected this by using Option iii with the subsequent period 2 reporting submission, which was filed on March 31, 2022.

GSA_MIGRATION

GSA_MIGRATION