Concordia Parish Hospital Service District Number One, State of Louisiana d/b/a Trinity Medical

Criteria: 2 CFR 200.303(a) establishes 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. Condition: The Hospital?s final expenditure listing identified as eligible and claimed under the Provider Relief Fund program and lost revenue calculation were not reviewed and approved by a separate individual outside of the preparer. In addition, Hospital?s special report submitted to the Department of Health and Human Services for Period 1 TIN #720578642 was not reviewed and approved by a separate individual outside of the preparer. The Hospital also excluded audit entries from the amounts reported in the lost revenue calculation and improperly allocated personnel costs over the reporting period. The Hospital calculated the quarterly personnel costs by taking the total personnel costs over the reporting period and divided by six for the six quarters being reported. Then the Hospital backed out wages claimed under the Paycheck Protection Loan Program and a bonus. This method caused the third quarter of 2020 to have a negative balance. This balance was not allocated over the other quarters which caused additional expenses to be claimed. Cause: The Hospital did not have an internal control process in place to document their conclusions, ensure the calculations were accurate, ensure that costs reported followed appropriate eligible cost guidelines, and ensure that all necessary accounting entries were included in the calculations. In addition, the Hospital did not have an internal control process in place to ensure review and approval of the expense listing, the lost revenue calculation claimed under the federal program, and the report submitted to the Department of Health and Human Services for Period 1 was documented. A review and approval of this information by someone other than the preparer is a requirement under the Uniform Guidance. Effect: Ineligible expenditures and lost revenue were claimed under the program and as a result, the report contained amounts that were not eligible to be reported. Questioned Costs: The total questioned costs were $24,642, of which $15,444 related to ineligible expenditures and $9,198 related to the lost revenue calculation. Context: A nonstatistical sample of 80 expenditures were selected for testing, which accounted for $253,071 of $2,462,523 direct program expenditures. Key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital implement a control process which includes documenting conclusions regarding how lost revenue and expenditure allocations calculations were performed and expenditures deemed to be eligible, performing a secondary review and approval of expenditures claimed under the federal program, and performing a secondary review and approval of required reports to be submitted to the federal agency. These secondary reviews are a requirement under Uniform Guidance to help ensure that the information submitted agrees to the supporting documentation. Views of Responsible Officials: Management agrees with the finding.