Craig Hospital and Affiliate

Finding: Reporting Criteria: The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act) appropriated funds to reimburse eligible health care providers for health care-related expenses or lost revenues attributable to coronavirus. These funds were be distributed by Health Resources and Services Administration (HRSA) through the Provider Relief Fund (PRF) program. Recipients who received one or more Provider Relief Fund (PRF) payments exceeding $10,000 in the aggregate during a Payment Received Period are required to report in each applicable Reporting Time Period. Payments received during April 10, 2020 to June 30, 2020 were required to be reported in between July 1, 2021 to September 30, 2021 (reporting period one). Condition: The Hospital had two errors in the initial report provided. The Hospital had a revenue deduction line item that was excluded from the lost revenue calculation, and a large self-pay patient where revenue was moved between quarters both effecting the overall lost revenue calculation. The Hospital over-stated their lost revenue for period one reporting by $489,000, however, the errors had no impact on eligible uses of the funds as total lost revenue exceeded the award received. Questioned Costs: None Context: We tested the one report submitted during the reporting period, to determine whether the report was completed timely and accurately. Effect: Federal oversight agencies, including the Department of Health and Human Services depend on accurate reporting to ensure proper spending of the award and compliance with payment Terms and Conditions. Cause: The hospital had a formula error in initial calculation which determined the amounts entered into the report. In addition, the Hospital had an incorrect interpretation of the reporting portal requirements related to revenue reversals and the impact of reporting that reversal by payor. Identification as a Repeat Finding: Not applicable Recommendation: We recommend policies and procedures over federal grant reporting be modified to ensure required reports are properly and accurately completed using the correct financial information. In addition, we recommend all underlying supporting calculations be reviewed for mathematical accuracy. Views of Responsible Officials and Planned Corrective Actions: The Hospital agrees with the finding. See separate report for planned corrective action.

FISCAL YEAR OF FINDING: 2021 AUDITOR FINDING: Single Audit 2021-001: Reporting-The Hospital had two errors in the initial report provided. The Hospital had a revenue deduction line item that was excluded from the lost revenue calculation, and a large self-pay patient where revenue was moved between quarters both effecting the overall lost revenue calculation. CLIENT PLANNED ACTION: Amended Period 1 lost revenue reporting, completed 12/20/2021. The reporting spreadsheet has been updated to include all applicable revenue deduction lines. We will ensure that future Self-Pay deductions are accounted for in the current period, knowing that they have been previously accrued for in the contractual reserve accrual entry and reflected on the Contract deduction line. CLIENT RESPONSIBLE PARTY: Dan Frank, CFO and Ann Worthington, Assistant Controller COMPLETION DATE: December 20, 2021