Bisbee Hospital Association, Inc.Non-Profit

Finding 2021-001 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Internal Control, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Organization?s internal controls over compliance related to reporting of allowable costs was not effective. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Guidance provided for the Provider Relief Fund further states that Provider Relief Fund payments cannot be used to cover costs that are reimbursed from other sources or other sources are obligated to reimburse. Context: The Organization receives cost-based reimbursement from Medicare through the annually filed cost report. As a result, allowable costs reported needed to factor in and exclude any amounts that are reimbursed though the annual cost report. Cause: Changing guidance and interpretations as to what were considered allowable costs per the terms and conditions of the Provider Relief Fund program required constant monitoring of the guidance being posted to the Provider Relief Fund website. HRSA guidance provided via responses to frequently asked questions was modified as late as October 26, 2021. Effect: Based on the 2021 Medicare cost report reimbursing about 18.3% of the Organization?s total costs, auditor estimated that approximately $186,511 in reported expenses could potentially be reimbursed through the cost report. Since the Organization reported lost revenues of approximately $2,040,000 more than Provider Relief Fund reimbursement for lost revenues, there was sufficient remaining lost revenue to offset the overreporting of expenses that could be partially reimbursed through the cost report. Therefore, no funds were estimated to be due back to the Provider Relief Fund. Questioned Costs: None. Recommendation: We recommend the Organization include in its controls over expenditures of federal awards the process of having an individual familiar with the award periodically review or monitor guidance that may be published by federal grantors. In addition, management should work with HRSA to reopen its reporting portal as this could impact the ability to claim future expenses and/or lost revenue related to future Provider Relief Funds amounts received. View of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.

Finding 2021-002 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Internal Control, Significant Deficiency Compliance Requirement: Allowable Cost Condition: The Organization did not meet its requirements to use the funds received to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenue that are attributable to coronavirus. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Context: Included in the submission of allowable expenses to HRSA were ongoing expenses of the Organization such as mortgage payments on existing debt, utility payments, and insurance premiums that were not directly attributable to the COVID pandemic or caused to be incurred for the COVID pandemic. As such these expenses are not an allowable COVID expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds. However, it was noted that the Organization had sufficient unreimbursed lost revenue and additional COVID-related expenses, that were incurred but not included on Reporting Period 1 portal submission, to cover the disbursements noted above. The unreimbursed lost revenue and additional COVID-related expense would be sufficient to support retaining the grant funding. Cause: Management oversight. Effect: The Organization is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Questioned Costs: None. Recommendation: We recommend that management review off COVID-related disbursements for allowability under the criteria provided by the Department of Health and Human Services. In addition, management should work with HRSA to reopen its reporting portal as this could impact the ability to claim expenses and/or lost revenue related to future Provider Relief Funds amounts received. View of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.