North Lincoln County Hospital District

2021-001 Provider Relief Fund Reporting of Lost Revenue Federal Agency Department of Health and Human Services CFDA 93.498 ? Provider Relief Fund and American Rescue Plan Rural Distribution Award Numbers Not applicable Criteria [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Under the terms and conditions of the award, the recipient certifies it will report actual net patient revenues for the periods reported on in its reporting of actual net patient revenues for its calculation of lost revenues due to coronavirus. Condition The District?s 2021 net patient service revenue was understated due in part to the exclusion of the 2021 Medicare cost report settlement. As a result, net patient service revenues were not accurately reported. Context This finding appears to be an isolated problem. Cause The District prepared its lost revenue calculations before adjustments for the accrual of its 2021 Medicare cost report settlement. Effect The actual net patient service revenues for the third and fourth quarters of 2020 and the first and second quarters of 2021 did not reflect the correct amounts to be used in its lost revenue calculations. If the adjustment was properly allocated to those quarters, the District would still have sufficient healthcare-related expenses attributable to coronavirus and lost revenues to use all of the Provider Relief Fund amounts received. Therefore, there is no effect on the District?s retention of the Provider Relief Funds. Recommendation We recommend the District?s management correct its lost revenue calculation in subsequent period reporting for the Provider Relief Fund. Views of responsible officials and planned corrective actions We agree the amounts did not match to the general ledger. We prepared the lost revenue calculations before adjustments for the accrual of our 2021 Medicare cost report settlement. We plan to correct the filing during the period 4 filing period due March 2023.