REFUGIO COUNTY MEMORIAL HOSPITAL DISTRICTLocal Government

COVID-19 Provider Relief Fund Federal Assistance Listing Number 93.498 U.S. Department of Health and Human Services Criteria: Reporting (45 CFR 75.342) and Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623). Condition: The District is required to prepare and submit the period one provider relief fund report to the U.S. Department of Health and Human Services. This report is to be prepared using accurate financial information and submitted by the deadline established. Questioned costs: $569,689 of lost revenue was over-reported. Context: The period one provider relief fund report was tested. The Hospital selected option 3 to report lost revenues based on quarterly gross patient service revenue by department, reduced by an allowance rate to account for adjustments for all third-party payers, charity care adjustments, and bad debt. A material error in the calculation of the patient service revenue for the quarters reported was identified. This included duplication of radiology department revenue, inclusion of other non-patient revenues, and inaccurate department revenues for the Q4 comparison, materially impacting the quarterly revenues reported. Effect: Errors were made in reporting quarterly total revenue/net charges from patient care for each year, 2019, 2020, and 2021. Lost revenue was not accurately reported. Cause: Internal controls over compliance were not in place to ensure the District properly calculated net patient service revenue. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Views of responsible officials and planned corrective actions: See attached corrective action plan for the District?s response to finding.