EIN: 590638499
UEI: WKG7SNMSKKA6
Audit also covers 3 related EINs: 453481327, 463406805, 463756071 · unlinked EINs have no separate FAC filing
Audited by: RSM US LLP
Oversight agency: 93 [Department of Health and Human Services]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 24, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 24, 2026 (112 days from today).
What is a management decision? →FAC accepted this audit on April 16, 2025 — management decision was due October 16, 2025.
We noted an instance of a reimbursement that was not net of applicable credits. Cause: The System does not have internal controls in place requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicabable credits. Effect or potential effect: Unallowable costs may have been charged to the program. Questioned cost: $6,945 known. Context: The System received funding that was not net of applicable credits. The funding received from the grantor was the full invoice amount, however, the actual expenditure was net of applicable credits ($6,945). Recommendation: We recommend the System establish formal internal control policies and procedures requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicable credits. Views of responsible officials: The System concurs with this finding. See page 50 for corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-001 - Allowable Costs/Cost Principles Identification of federal program: Assistance Listing No. 93-493 - Congressional Directives Criteria or specific requirement: Section 200.406 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) provides the requirements for applicable credits. Applicable credits refer to tansactions are purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the recipient or subrecipient relate to allowable costs, they must be credited to the Federal award either as a cost reduction or cash refund, as appropriate. Condition: We noted an instance of a reimbursement that was not net of applicable credits. Cause: The System does not have internal controls in place requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicabable credits. Effect or potential effect: Unallowable costs may have been charged to the program. Questioned cost: $6,945 known. Context: The System received funding that was not net of applicable credits. The funding received from the grantor was the full invoice amount, however, the actual expenditure was net of applicable credits ($6,945). Recommendation: We recommend the System establish formal internal control policies and procedures requiring supervisory review and approval for allowability and adherence to cost principles specifically related to reimbursement net of applicable credits. Views of responsible officials: The System concurs with this finding. See page 50 for corrective action plan.
Identifying Number: 2024-001 Finding: Allowable Costs/Cost Principles Context: The System received funding that was not net of appliccable credits. The funding received from the grantor was the full invoice amount, howver, the actual expenditure was net of applicable credits ($6,945). Corrective Actions Taken or Planned: The Director of the Office of Sponsored Programs and the Manager of Sponsored Programs will develop a standardized document checklist for all high-value expenditures. This checklist will require all Sponsored Programs analysts to submit complete documentation with expense reports and proof of payment and have their respective immediate supervisor/manager review for compliance before final approval by the Director. a. Correcting the gaps between invoicing processes and collecting the Departments/AP proof of payment b. Returning overpayments, if applicable c. Implementing organizational changes such as updated policies and/or procedures d. Educating the team(s) and/or Department(s) on internal controls, processes and accuracy best practices during the Grant management process Planning Process Compliance with Regulations: The Director and Manager from Sponsored Programs will ensure the corrective actions align with applicable federal grant regulations and guidelines. We will create: - Processes in which we will adopt verification procedures for invoices and collections. - Create/update Standard Operating Procedures (SOPs). - Provide our team with updated training material (working pratice guidelines -WPGs), so they have clear expectations and understand our compliance mechanism. - Implement internal controls, with the Director and Manager from Sponsored Programs developing checks and balances at the end of each month to ensure compliance in all the grant's portfolio. Communication: The Director and Manager from Sponsored Programs will communicate the corrective action plan to all relevant staff and stakeholders. Follow-up: The Director and Manager from Sponsored Programs will regularly monitor progress and adjust to resolve any inefficiencies. Training: The Director and Manager from Sponsored Programs will work on the development and delivery of mandatory training sessions for all Sponsored Programs relevant staff. This will include (not limited to): - Retrain on updated policies and procedures (OSP tean, Departments and stakeholders, if applicable) - Retrain on workflows and system (OSP team, Departments and stakeholders, if applicable) - Retrain on process improvement (OSP team, Departments and stakeholders, if applicable) Policy Updates: Revision of existing policies or creation of new ones to clarify procedures. System Enhacements: Implemeting new software/program that improves data accuracy and compliance in all Federal/State and Local Grants throughout Nicklaus Children's Hospital. Monitoring and Oversight: The Director and Manager from the Sponsored Programs will monitor transactions and reporting processes more frequently. Deadline for Implementation: Immediate action: The Director of Sponsored Programs transitioned the staff member responsible for the findings to an area where their expertise is most valuable. This CAPA will take effect immediately and be fully implemented within six weeks by April 07, 2025, allowing time to create/revise SOPs, Working Practice Guidelines (WPGs). Checklists and training/retraining sessions for stakeholders and OSP team members.
Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were not incurred until 2025. Cause: Drawdown on reimbursement requests were submitted to the grantor prior to the System incurring qualifying expenditures. Effect or potential effect: This resulted in material non-compliance with the allowable costs/cost principles requirement for the grant program. The expenditures included on the 2024 Schedule of Expenditures of Federal Awards was overstated. Questioned cost: $92,130 known. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: The finding is considered systemic in nature. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby qualifying expenditures are incurred prior to requesting reimbursement from the grantor. Views of responsible officials: The System concurs with this finding. See page 52 for corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-002 - Material Weakness: Allowable Costs/Cost Principles Idenfication of federal program: Assistance Listing No. 93.493 - Congressional Directives Criteria or specific requirement: Section 200.403(e) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards requires that "(e) Be determined in accordance with generally accepted accounting principles (GAAP)". GAAP does not allow reconding of the expenditure until the expense is incurred. In addition, Section 200.502(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards required that "The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs". Condition: Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were not incurred until 2025. Cause: Drawdown on reimbursement requests were submitted to the grantor prior to the System incurring qualifying expenditures. Effect or potential effect: This resulted in material non-compliance with the allowable costs/cost principles requirement for the grant program. The expenditures included on the 2024 Schedule of Expenditures of Federal Awards was overstated. Questioned cost: $92,130 known. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: The finding is considered systemic in nature. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby qualifying expenditures are incurred prior to requesting reimbursement from the grantor. Views of responsible officials: The System concurs with this finding. See page 52 for corrective action plan.
Identifying Number: 2024-002 Finding: Material Weakness: Allowable Costs/Cost Principles Context: Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were not incurred until 2025. Corrective Actions Taken or Planned: The Director of the Office of Sponsored Programs and the Manager of Sponsored Programs will develop a standardized document checklist for all high-value expenditures. This checklist will require all Sponsored Programs analysts to submit complete documentation with expense reports and proof of payment and have their respective immediate supervisor/manager review for compliance before final approval by the Director. a. Correcting the gaps between invoicing processes and collecting the Departments/AP proof of payment b. Returning overpayments, if applicable c. Implementing organizational changes such as updated policies and/or procedures d. Educating the team(s) and/or Department(s) on internal controls, processes and accuracy best practices duing the Grant management processes. Planning Process: Compliance with Regulations: The Director and Manager from Sponsored Programs will ensure the corrective actions align with applicable federal grant regulations and guidelines. We will create: - Create processes in which we will adopt verification procedures for invoices and collections. - Create/update Standard Operating Procedures (SOPs) - Provide our team with updated training material (working practice guidelines - WPGs), so they have clear expectations and understand our compliance mechanism. - Implement internal controls, with the Director and Manager from Sponsored Programs developing checks and balances at the end of each month to ensure compliance in all the grant's portfolio. Communication: The Director and Manager from Sponsored Programs will communicate the corrective action plan to all relevant staff and stakeholders. Follow-up: The Director and Manager from Sponsored Programs will regularly monitor progress and adjust to resolve any inefficiencies. Training: The Director and Manager from Sponsored Programs will work on the development and delivery of mandatory training sessions for all Sponsored Programs relevant staff. This will include (not limited to): - Retrain on updated policies and procedures (OSP team, Departments and stakeholders, if applicable) - Retrain on workflows and system (OSP team, Departments and stakeholders, if applicable) - Retrain on process improvement (OSP team, Departments and stakeholders, if applicable) Policy Updates: Revision of existing policies or creation of new ones to clarify procedures. System Enhacements: Implementing new software/program that improves data accuracy and compliance in all Federal/State and Local Grants throughout Nicklaus Children's Hospital. Monitoring and Oversight: The Director and Manager from the Sponsored Programs will monitor transactions and reporting processed more frequently. Deadline for Implementation: Immediate Action: The Director of Sponsored Programs transitioned the staff member responsible for the findings to an area where their expertise is most valuable. This CAPA will take effect immediately and be fully implemented within six weeks by April 07, 2025, allowing time to create/revise SOPs, Working Practice Guidelines (WPGs), Checklists and training/retraining sessions for stakeholders and OSP team members.
We noted an incorrect progress report being submitted to the grantor. Cause: Formal internal control policies and procedures requiring supervisory review of reports have not been established. Effect or potential effect: The lack of adequate internal control policies and procedures requiring timely supervisory review of reports filed with grantor may result in inaccurate information being reported and non-compliance with program requirements. This finding resulted in an incorrect progress report being submitted to the grantor. Questioned cost: not applicable. Context: An incorrect progress report was submitted to the grantor. Recommendation: We recommend that the System establish formal internal control policies and procedures requiring supervisory review and approval of all reports filed with the grantor to assure the accuracy and completeness of data included in such reports. All such reviews and approvals should be properly documented. Views of responsible officials: The System concurs with this finding. See page 54 for corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-003 - Reporting Idenfication of federal program: Assistance Listing No. 93.493 - Congressional Directives Criteria or specific requirement: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards requires that the auditee maintain internal control over financial reporting which includes supervisory review of reports prepared and submitted to the grantor to assure accuracy and completeness of data included in the reports. Condition: We noted an incorrect progress report being submitted to the grantor. Cause: Formal internal control policies and procedures requiring supervisory review of reports have not been established. Effect or potential effect: The lack of adequate internal control policies and procedures requiring timely supervisory review of reports filed with grantor may result in inaccurate information being reported and non-compliance with program requirements. This finding resulted in an incorrect progress report being submitted to the grantor. Questioned cost: not applicable. Context: An incorrect progress report was submitted to the grantor. Recommendation: We recommend that the System establish formal internal control policies and procedures requiring supervisory review and approval of all reports filed with the grantor to assure the accuracy and completeness of data included in such reports. All such reviews and approvals should be properly documented. Views of responsible officials: The System concurs with this finding. See page 54 for corrective action plan.
Identifying Number: 2024-003 Finding: Reporting Context: An incorrect progress report was submitted to the grantor. Corrective Actions Taken or Planned: The Director of the Office of Sponsored Programs and the Manager of Sponsored Programs will develop a standardized document checklist for all high-value expenditures. This checklist will require all Sponsored Programs analysts to submit complete documentation with expense reports and proof of payment and have their respective immediate supervisor/manager review for compliance before final approval by the Director. a. Implementing organizational cjanges such as updated policies and/or procedures b. Educating the team(s) and/or Department(s) on internal controls, processes and accuracy best practices during the Grant management process c. Oversight of drawdown requests by the Director of Sponsored Programs to ensure accuracy of request Planning Process: Compliance with Regulations: The Director and Manager from Sponsored Programs will ensure the corrective actions align with applicable federal grant regulations and guidelines. We will create: - Implement internal controls, with the Director and Manager from Sponsored Programs developing checks and balances at the end of each month to ensure compliance in all the grant's portfolio. - Oversight of all drawdown requests, ensuring complete and accurate supporting documentation. Communication: The Director and Manager from Sponsored Programs will communicate the corrective action plan to all relevant staff and stakeholders. Follow-up: The Director and Manager from Sponsored Programs will regularly monitor progress and adjust to resolve any inefficiencies. Training: The Director and Manager from Sponsored Programs will work on the development and delivery of mandatory training sessions for all Sponsored Programs relevant staff. This will include (not limited to): - Retrain on updated policies and procedures (OSP team, Departments and stakeholders, if applicable) - Retrain on workflows and system (OSP team, Departments and stakeholders, if applicable) - Retrain on process improvement (OSP team, Departments and stakeholders, if applicable) Policy Updates: Revision of existing policies or creation of new ones to clarify procedures. System Enhacements: Implementing new software/program that improves data accuracy and compliance in all Federal/State and Local Grants throughout Nicklaus Children's Hospital. Monitoring and Oversight: The Director and Manager from the Sponsored Programs will monitor transactions and reporting processed more frequesntly. Deadline for Implementation: Immediate Action: The Director of Sponsored Programs transitioned the staff member responsible for the findings to an area where their expertise is most valuable. This CAPA will take effect immediately and be fully implemented within six weeks by April 07, 2025, allowing time to create/revise SOPs, Working Practice Guidelines (WPGs), Checklists and training/retraining sessions for stakeholders and OSP team members.
The aproved grant includes a budget period from September 30, 2023 through September 29,2026. Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were incurred prior to the budget period start date. Cause: Expenditures were incurred prior to the budget period start date, however, reimbursement was requested from the grantor. Effect or potential effect: This resulted in material non-compliance with the period of performance requirement for the grant programs. The expenditures included on the 2024 Schedule of Expenditures of Federal Awards were overstated. Questioned cost: $232,870. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were incurred prior to the budget period start date. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby the drawdown on reimbursement requests include expenditures incurred within the budget period of the approved grant. Views of responsible officials: The System concurs with this finding. See page 55 for corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-004 - Material Weakness: Period of Performance Identification of federal program: Assistance Listing No. 93-493 - Congressional Directives Criteria or specific requirement: Section 200.1 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards requires that, "A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the federal awarding agency or pass-through entity" Condition: The aproved grant includes a budget period from September 30, 2023 through September 29,2026. Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were incurred prior to the budget period start date. Cause: Expenditures were incurred prior to the budget period start date, however, reimbursement was requested from the grantor. Effect or potential effect: This resulted in material non-compliance with the period of performance requirement for the grant programs. The expenditures included on the 2024 Schedule of Expenditures of Federal Awards were overstated. Questioned cost: $232,870. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were incurred prior to the budget period start date. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby the drawdown on reimbursement requests include expenditures incurred within the budget period of the approved grant. Views of responsible officials: The System concurs with this finding. See page 55 for corrective action plan.
Identifying Number: 2024-004 Finding: Material Weakness: Period of Performance Context: Expenditures were included on the 2024 Schedule of Expenditures of Federal Awards, however, the expenditures were incurred prior to the budget period start date. Corrective Actions Taken or Planned: The Director of the Office of Sponsored Programs and the Manager of Sponsored Programs will develop a standardized document checklist for all high-value expenditures. This checklist will require all Sponsored Programs analysts to submit complete documentation with expense reports and proof of payment and have their respective immediate supervisor/manager review for compliance before final approval by the Director. a. Implementing organizational changes such as updated policies and/or procedures b. Educating the team(s) and/or Department(s) on internal controls, processes and accuracy best practices during the Grant management process c. Oversight of drawdown requests by the Director of Sponsored Programs to ensure accuracy of request Planning Process: Compliance with Regulations: The Director and Manager from Sponsored Programs will ensure the corrective actions align with applicable federal grant regulations and guidelines. We will create: - Implement internal controls, with the Director and Manager from Sponsored Programs developing checks and balances at the end of each month to ensure compliance in all the grant's portfolio. - Oversight of all drawdown requests, ensuring complete and accurate supporting documentation. Communication: The Director and Manager from Sponsored Programs will communicate the corrective action plan to all relevant staff and stakeholders. Follow-up: The Director and Manager from Sponsored Programs will regularly monitor progress and adjust to resolve any inefficiencies. Training: The Director and Manager from Sponsored Programs will work on the development and delivery of mandatory training sessions for all Sponsored Programs relevant staff. This will include (not limted to): - Retrain on updated policies and procedures (OSP team, Departments and stakeholders, if applicable) - Retrain on workflows and system (OSP team, Departments and stakeholders, if applicable) - Retrain on process improvement (OSP team, Departments and stakeholders, if applicable) Policy Updates: Revision of existing policies or creation of new ones to clarify procedures. System Enhacements: Implementing new software/program that improves data accuracy and compliance in all Federal/State and Local Grants throughout Nicklaus Children's Hospital. Monitoring and Oversight: The Director and Manager from the Sponsored Programs will monitor transactions and reporting processed more frequently. Deadline for Implementation: Immediate Action: The Director of Sponsored Programs transitioned the staff member responsible for the findings to an area where their expertise is most valuable. This CAPA will take effect immediately and be fully implemented within six weeks by April 07, 2025, allowing time to create/revise SOPs, Working Practice Guidelines (WPGs), Checklists and training/retraining sessions for stakeholders and OSP team members.
We noted two instances of request for reimbursement prior to the expenditures being incurred. Cause: Drawdown on reimbursement requests were submitted to the grantor prior to the System incurring qualifyig expenditures. Effect or potential effect: This resulted in material non-compliance with the cash management requirement for the grant program. Questioned cost: $92,130 known. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: The finding is considered systemic in nature. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby qualifying expenditured are incurred prior to requesting reimbursement from the grantor. Views of responsible officials: The System concur wuth this finding. See page 57 for corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2024-005 -Material Weakness: Cash Management Identification of federal program: Assistance Listing No. 93-493 - Congressional Directives Criteria or specific requirement: Per the OMB Compliance Supplement, "For grants and cooperative agreements to non-federal entities that are funded on a reimbursement basis, determine that expenditures, as defined by 2 CFR 200.1, were incurred prior to date of the reimbursement request." Condition: We noted two instances of request for reimbursement prior to the expenditures being incurred. Cause: Drawdown on reimbursement requests were submitted to the grantor prior to the System incurring qualifyig expenditures. Effect or potential effect: This resulted in material non-compliance with the cash management requirement for the grant program. Questioned cost: $92,130 known. The 2024 Schedule of Expenditures of Federal Awards has been corrected for this finding. Context: The finding is considered systemic in nature. Recommendation: We recommend that the System personnel administering the grant program comply with the System's established process, whereby qualifying expenditured are incurred prior to requesting reimbursement from the grantor. Views of responsible officials: The System concur wuth this finding. See page 57 for corrective action plan.
Identifying Number: 2024-005 Finding: Material Weakness: Cash Management Context: Drawdown on reimbursement requests were submitted to the grantor prior to the System incurring qualifying expenditures. Corrective Actions Taken or Planned: The Director of the Office of Sponsored Programs and the Manager of Sponsored Programs will develop a standardized document checklist for all high-value expenditures. This checklist will require all Sponsored Programs analysts to submit complete documentation with expense reports and proof of payment and have their respective immediate supervisor/manager review for compliance before final approval by the Director. a. Implementing organizational changes such as updated policies and/or procedures b. Educating the team(s) and/or Department(s) on internal controls, processes and accuracy best practices during the Grant management process c. Oversight of drawdwn requests by the Director of Sponsored Programs to ensure accuracy of request Planning Process: Compliance with Regulations: The Director and Manager from Sponsored Programs will ensure the corrective actions align with applicable federal grant regulations and guidelines. We will create: - Implement internal controls, with the Director and Manager from Sponsored Programs developing checks and balances at the end of each month to ensure compliance in all the grant's portfolio. - Oversight of all drawdown requests, ensring complete and accurate supporting documentation. Communication: The Director and Manager from Sponsored Programs will communicate the corrective action plan to all relevant staff and stakeholders. Follow-up: The Director and Manager from Sponsored Programs will regularly monitor progress and adjust to resolve any inefficiencies. Training: The Director and Manager from Sponsored Programs will work on the development and delivery of mandatory training sessions for all Sponsored Programs relevant staff. This will include (not limited to): - Retrain on updated policies and procedures (OSP team, Departments and stakeholders, if applicable) - Retrain on workflows and system (OSP team, Departments and stakeholders, if applicable) - Retrain on process improvement (OSP team, Departments and stakeholders, if applicable) Policy Updates: Revision of existing policies or creation of new ones to clarify procedures. System Enhacements: Implementing new software/program that improves data accuracy and compliance in all Federal/State and Local Grants throughout Nicklaus Children's Hospital. Monitoring and Oversight: The Director and Manager from the Sponsored Programs will monitor transactions and reporting processed more frequently. Deadline for Implementation: Immediate Action: The Director of Sponsored Programs transitioned the staff member responsible for the findings to an area where their expertise is most valuable. This CAPA will take effect immediately and be fully implemented within six weeks by April 07, 2025, allowing time to create/revise SOPs, Working Practice Guidelines (WPGs), Checklists and training/retraining sessions for stakeholders and OSP team members.
FAC accepted this audit on April 22, 2024 — management decision was due October 22, 2024.
FAC accepted this audit on May 17, 2023 — management decision was due November 17, 2023.
FAC accepted this audit on June 6, 2022 — management decision was due December 6, 2022.
In the System's Period 1 and Period 2 repoting in the PRF reporting portal, the System reported lost revenue using Option ii, the difference between budgeted and actual patient care revenues. The amounts reported as budgeted revenues for each quarter of 2021 were from a budget covering only the period through December 31, 2020. The System did not have a budget approved before March 27, 2020 that covered the 2021 period of availability. Therefore the System's calculation of lost revenue was inappropriately reported under Option ii and should have been reported under Option iii. Additionally, in the System's Period 1 and Period 2 reporting in the PRF reporting portal, the System overstated actual patient care revenues for each quarter of 2021. Context: The total overstatement of actual patient care revenues for 2021 was $4,600,089, including $2,178,746 for the quarter ended March 31, 2021. The System reported lost revenue for the quarter ended March 31, 2021, which was understated by $2,178,746. For all other quarters of 2021, the System did not report lost revenue, because actual revenue exceeded budget. had the correct amounts of actual revenue been reported for the second through fourth quarters of 2021, actual revenue still would have exceeded budget for each of those quarters. Cause: In the preparation of the reports, the appropriate option for calculating lost revenue was not selected, and certain types of actual 2021 patient care revenues were double counted in error. Review processes were performed before the reports were submitted, but these reviews were not effective in detecting and correcting the errors before report submission. Effect: the System's reporting in the PRF reporting portal inaccurately described the method used to calculate lost revenue. The calculation of lost revenues did not comply with the Terms and Conditions of the federal program, and total allowable costs reported in the PRF reporting portal were understated. Questioned Costs: None Repeat Finding: NO Recommendation: We recommend that internal controls be strengthened related to review of the quarterly lost revenue calculation and reporting in the PRF reporting portal. We suggest these reviews include review of documentation supporting each dollar amount included in the report. Views of responsible officials of the auditee: Management agrees with the finding and the auditor's recommendation.
Show full finding ▾Hide full finding ▴Federal Program: U.S. Department of Health and Human Services - ALN 93.498, Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution. Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Specific criteria are established by the U.S. Department of Health and Human Services (HHS) with respect to the allowable cost and reporting requirements for this program including: - Funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. - Entities may elect to calculate and report lost revenue using one of three options. For entities electing to report lost revenues using Option ii, the difference between budgeted and actual patient care revenues, budgets must be approved before March 27, 2020 and cover each quarter during the period of availability. Entities electing to calculate lost revenues using another reasonable method should report using Option iii. Condition: In the System's Period 1 and Period 2 repoting in the PRF reporting portal, the System reported lost revenue using Option ii, the difference between budgeted and actual patient care revenues. The amounts reported as budgeted revenues for each quarter of 2021 were from a budget covering only the period through December 31, 2020. The System did not have a budget approved before March 27, 2020 that covered the 2021 period of availability. Therefore the System's calculation of lost revenue was inappropriately reported under Option ii and should have been reported under Option iii. Additionally, in the System's Period 1 and Period 2 reporting in the PRF reporting portal, the System overstated actual patient care revenues for each quarter of 2021. Context: The total overstatement of actual patient care revenues for 2021 was $4,600,089, including $2,178,746 for the quarter ended March 31, 2021. The System reported lost revenue for the quarter ended March 31, 2021, which was understated by $2,178,746. For all other quarters of 2021, the System did not report lost revenue, because actual revenue exceeded budget. had the correct amounts of actual revenue been reported for the second through fourth quarters of 2021, actual revenue still would have exceeded budget for each of those quarters. Cause: In the preparation of the reports, the appropriate option for calculating lost revenue was not selected, and certain types of actual 2021 patient care revenues were double counted in error. Review processes were performed before the reports were submitted, but these reviews were not effective in detecting and correcting the errors before report submission. Effect: the System's reporting in the PRF reporting portal inaccurately described the method used to calculate lost revenue. The calculation of lost revenues did not comply with the Terms and Conditions of the federal program, and total allowable costs reported in the PRF reporting portal were understated. Questioned Costs: None Repeat Finding: NO Recommendation: We recommend that internal controls be strengthened related to review of the quarterly lost revenue calculation and reporting in the PRF reporting portal. We suggest these reviews include review of documentation supporting each dollar amount included in the report. Views of responsible officials of the auditee: Management agrees with the finding and the auditor's recommendation.
Finding: In the System's Period 1 and Period 2 reporting in the PRF reporting portal, the System reported lost revenue using Option ii, the difference between budgeted and actual patient care revenues. The amounts reported as budgeted revenues for each quarter of 2021 were from a budget covering only the period through December 31, 2020. The System did not have a budget approved before March 27, 2020 that covered the 2021 period of availability. Therefore, the System's calculation of lost revenue was inappropriately reported under Option ii and should have been reported under Option iii. Additionally, in the System's Period 1 and Period 2 reporting in the PRF reporting portal, the System overstated actual patient care revenues for each quarter of 2021. Corrective Actions Taken or Planned: Effective immediately, Management will ensure that the information in the PRF reporting portal is correct and the appropriate level of internal review is conducted. The review will take place by the Administrative Director of Corporate Finance, Laurie Levine and will be complete when the last reporting period is over, currently scheduled for March 31, 2023. Such review will include review of all supporting documentation It should be noted that the finding did not result in any questioned costs and the System is not required to return any funds.
FAC accepted this audit on October 13, 2021 — management decision was due April 13, 2022.
FAC accepted this audit on May 7, 2020 — management decision was due November 7, 2020.
FAC accepted this audit on May 3, 2019 — management decision was due November 3, 2019.
FAC accepted this audit on May 3, 2018 — management decision was due November 3, 2018.
FAC accepted this audit on April 5, 2017 — management decision was due October 5, 2017.
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