Public Hospital District of Beaverhead CountyLocal Government

Section III ? Federal Award Findings and Questioned Costs ?Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan ARP Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #264230898 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance 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 expenditures identified as eligible and claimed under the Provider Relief Fund program were reviewed and approved by separate individuals outside of the preparer. However, the Hospital?s special report submitted to the Department of Health and Human Services for Period 1 TIN #264230898 was not reviewed and approved by a separate individual outside of the preparer. Cause ? The Hospital had multiple individuals identifying and compiling eligible costs, however, the Hospital did not have an internal control process in place to ensure a secondary review and approval, of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing, was documented. The final expenditure listing was used to claim allowable costs under the federal program. The review and approval of the final expenditure listing submitted to the Department of Health and Human Services for Period 1 was not performed by someone other than the preparer of the report. Effect ? Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed. Questioned Costs ? None reported. Context/Sampling ? Testing was performed over payroll, supplies, and equipment for activities allowed and unallowed and allowable costs/cost principles. Key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Year(s) ? No. Recommendation ? We recommend the Hospital implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports submitted to the federal agency. Views of Responsible Officials ? Management agrees with the finding.

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