PUBLIC HOSPITAL DISTRICT 1OF KLICKITAT C

2021-001 Unapproved Budgeted Revenues Included in Lost Revenue Calculation Federal Agency Department of Health and Human Services Assistance Listing Number 93.498 ? Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Criteria [ ] Significant Deficiency [ ] Material Weakness [X] Compliance Finding Under the terms and conditions of the award, the recipient certifies it will include only budgeted revenues approved prior to March 27, 2020, for the entire period of availability, in its calculation of lost revenues. Condition The District used its 2021 budget, which was not approved prior to March 27, 2020, in its calculation of lost revenues for calendar year 2021, in its reporting of Provider Relief Fund and ARP Rural Distribution to the Health Resource and Services Administration. Context The finding appears to be an isolated instance. Effect No lost revenue was calculated for calendar year 2021. The use of the 2021 budget has no effect on the Provider Relief Funds the District retained on the Period 1 report and will have no effect on the retention of Provider Relief Fund in future reporting periods. Cause The District did not have proper review of internal documentation used to report on federal awards. Recommendation We recommend the District changes its lost revenue reporting method to Option 3 in the next reporting period, which will allow for any reasonable method, which could include budgeted revenues approved after March 27, 2020, to be used in the lost revenue calculation for calendar years 2021 and 20222 or to only provide lost revenue data for calendar year 2020. Views of responsible officials and planned corrective action Management will use Method 3 for all lost revenue calculations going forward.