Southeast Georgia Health System, Inc.Non-Profit

Section III: Findings and Questioned Costs Related to the Audit of Federal Awards Finding 2022-001 Material Weakness and Material Noncompliance over Reporting Assistance Listing 93.498 Criteria: The Department of Health and Human Services provided terms and conditions associated with the Provider Relief Fund (?PRF?). The use of the PRF distributions is required to be reported to the Department of Health and Human Services by recipients through the PRF reporting portal by calendar quarter and by nature and/or function. Management should have effectively designed controls in place to prevent, or detect and correct, material noncompliance with the reporting requirements of PRF. Condition: Management submitted expenses through the Department of Health and Human Services PRF reporting portal that did not reconcile to the underlying expense details by calendar quarter and by nature and/or function as provided by management, and therefore did not comply with PRF reporting requirements. Management?s process for reporting through the PRF portal lacked effective controls to prevent, or detect and correct, such reporting noncompliance on a timely basis. Cause: Effective controls were not designed and implemented sufficient to prevent, or detect and correct, inaccurate reporting and classification of coronavirus-related expenses by calendar quarter and by nature and/or function to the Department of Health and Human Services through the PRF reporting portal. Effect: Inaccurate information was reported through the Department of Health and Human Services PRF reporting portal with respect to classification of expenses by calendar quarter and by nature and/or function, resulting in material noncompliance with PRF reporting requirements. Questioned Costs: N/A Context: For PRF reporting periods 1 and 2, which include periods of availability that ended during the System?s fiscal year ended April 30, 2022, management reported through the PRF reporting portal healthcare related expenses totaling $9,775,041, and general and administrative expenses totaling $19,213,291. The results of audit procedures determined that the entire $28,988,332 in expenses should have been classified as general and administrative during PRF reporting periods 1 and 2. Identification of Prior Year Audit Findings: N/A Auditor?s Recommendation: Effective controls over compliance should be implemented to ensure the classification of allowable costs reported to the Department of Health and Human Services through the PRF reporting portal is accurate with respect to calendar quarter and nature and/or function, and in compliance with PRF reporting requirements. Views of responsible officials: Management agrees with the findings and will implement controls to ensure future PRF reporting compliance. See management?s Corrective Action Plan.