BAPTIST HEALTH SYSTEM, INC

Finding 2020-002 (Reporting ? SEFA Preparation) Information on the federal programs: Federal Grantor: United States Department of Homeland Security Pass-Through Entity: Florida Division of Emergency Management CFDA No.: 97.036 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Baptist Health System Market: Florida Pass-Through Award Number: 17-PA-U5-04-26-03-189 Pass-Through Award Period: 10/3/2016?10/19/2016 Federal Grantor: United States Department of Homeland Security Pass-Through Entity: Florida Division of Emergency Management CFDA No.: 97.036 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Baptist Health System Market: Florida Pass-Through Award Number: Z0345 Pass-Through Award Period: 9/4/2017?10/18/2017 Criteria or specific requirement (including statutory, regulatory, or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? The Uniform Guidance 2 CFR section 200.510 states, ?(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ?200.502 Basis for determining Federal awards expended.? The Uniform Guidance 2 CFR section 200.501 states, ?(a) Audit required. A non-Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part.? Condition: Baptist Health System, Inc. and Subsidiaries (the System) incurred eligible expenditures and had approved project worksheets under program 97.036 (Program) during the fiscal year ended September 30, 2018, and did not prepare a complete and accurate listing of all federal awards in the schedule of expenditures of federal awards (SEFA) for their fiscal year ended September 30, 2018. As a result, the required Uniform Guidance audit for the fiscal year ended September 30, 2018, was not conducted. The System received approval from the United States Department of Homeland Security to include previously approved, awarded, and expended federal grants under assistance listing 97.036 to be included in the System's fiscal year 2020 SEFA. Cause: The System?s internal controls in place over the proper identification of awards under the Program and thus preparation of the SEFA in the correct period were not sufficient to properly identify and accurately report all expenditures of federal awards. Questioned costs: None. Context: Expenditures for major federal programs were not reported or adjusted in the SEFA in a timely manner as follows: 1. Assistance Listing Number 97.036 Disaster Grants (Pass-Through Entity: Florida Division of Emergency Management ? expenditures totaling $1,324,952 for project worksheets approved during fiscal year 2018 were not properly or timely identified and therefore improperly excluded from the System?s fiscal year 2018 SEFA. Accordingly, the required Uniform Guidance audit over this program was not completed. Effect or potential effect: The lack of identifying and timely reporting the expenditures under this Program upon approval of related project worksheets in fiscal year 2018 resulted in the required Uniform Guidance audit not being completed (for fiscal year 2018). Identification as a repeat finding, if applicable: Not applicable. Recommendation: The System should review its internal controls over the process of identifying, accumulating, and reporting expenditures of federal awards. In addition, the System should re-communicate its written policy and procedure on the preparation of a quarterly SEFA template to locations administering the awards, including the importance of timely review and accurate reporting of all federal expenditures. Views of responsible officials: The System agrees with the comment and has developed a plan to correct the finding.