Parker Health Group, Inc. and SubsidiariesNon-Profit

Finding 2021-001 - Significant Deficiency in Internal Control - Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Assistance Listing No.: COVID-19 - 93.498 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Not applicable Award Number: Not applicable Award Year: 2020 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Questioned Costs: None reported. Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. PRF payments must be used for allowable expenses and lost revenue described in the PRF terms and conditions and specified in guidance issued by the U.S. Department of Health and Human Services. Activities allowed have been defined as expense used to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. Condition/Context: The Company inaccurately calculated lost revenue for the Period 1 and Period 2 submissions for Parker at Somerset, Inc., TIN 47-1944928. As a result, the amounts reported were inaccurate for the PRF reporting required in accordance with the U.S. Department of Health and Human Services guidance. The adjustment needed within the PRF report to correct the total lost revenue amount from $1,881,909 to $1,952,979 would result in an increase in the measurement of lost revenues of $71,070. Effect: Lost revenue calculated and reported to Health Resources and Services Administration (HRSA) for Parker at Somerset, Inc., TIN 47-1944928 was not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An oversight by management during the review process that failed to identify the improper inclusion of non-patient service revenues of $71,070 in the calculation of lost revenues. Recommendation: We recommend that management implement procedures to ensure that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Views of Responsible Officials: The Company agrees with the finding.