Asante Health SystemNon-Profit

Finding #2022-001 Program Information: Federal Program: Provider Relief Fund (PRF) CFDA: 93.498 Federal Agency: Department of Health & Human Services Award Year: PRF Periods 2 and 3: Funds received July 1, 2020 through June 30, 2021 Criteria or requirement Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Reporting (L) ? Special Reporting Under the terms and conditions of the award, Provider Relief Funds(PRF) is subject to 45 CFR section 75.302 (Financial management and standards for financial management systems). The PRF program requires special reporting through the Provider Relief Fund Reporting Portal that contains key line items containing critical information based on the period reported on, which includes the Calculation of Lost Revenues Attributable to Coronavirus. The Provider Relief Programs: Provider Relief Fund and ARP Rural Payments Frequently Asked Questions states that PRF payments may not be applied to the same expenses and lost revenues that were reported on in prior reporting periods. Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding During our testing over reporting, we observed management did not have effective internal controls in place to ensure lost revenues reported in the Portal were not duplicated between a subsidiary entity and the parent entity, resulting in an overstatement of lost revenues reported in the Portal. Lost revenues attributable to Coronavirus in the amount of $2,382,081 were reported in both the parent entity?s PRF reports for the general distribution report for Period 2 and for Ashland Community Healthcare Services and Asante Three Rivers, subsidiaries, targeted distribution reports for Period 2 (i.e., lost revenues were duplicated). Cause and possible asserted effect Controls were not operating effectively to detect and correct duplicate lost revenues shown on the portal reporting between the parent entity and the stand-alone subsidiary reports for targeted funds. Identification of questioned costs and how they were computed None. Despite the duplicated lost revenues, there was still sufficient lost revenues in excess of PRF payments received for Period 2, and therefore the Company has demonstrated it did earn all of the PRF payments received. This matter was isolated to the error in reporting requirements under the Federal grant program. Sample Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Repeat finding from prior year This finding is not a repeat of a finding in the immediately prior audit. Recommendation We recommend Asante management enhance their internal control process to ensure the data underlying the portal reporting is appropriately reviewed by an individual other than the preparer to ensure that duplicate lost revenue information is not reported. Views of Responsible Officials There were sufficient qualifying lost revenues to receive and earn all PRF funds received, regardless of the reporting error identified and described in the ?condition found? section above. Therefore, management believes no repayment of PRF funds received would be required. Management is implementing a process to add additional review steps prior to finalizing future reporting submissions.

Finding #2021-01; Program Information: Federal Program: Coronavirus Relief Fund, CFDA: 21.019, Federal Agency: United States Department of Treasury, Award Year: October 1, 2020 to September 30, 2021; Criteria or requirement: Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CRF 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, (Subpart D, Section 200.303), the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per Department of Treasury guidance in the Federal Register Vol. 86, No. 10 dated January 15, 2021, the CARES Act provides that payments from the Fund may only be used to cover costs that are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID-19).; Condition found, including facts that support the deficiency identified in the finding and information to provide proper perspective for judging the prevalence and consequences of the finding: For 12 of 40 samples of payroll expenditures, no approval was available of the timesheets that support the payroll expenditure claimed. No other control documentation was available supporting accuracy of the hours claimed for this grant. All expenditures claimed were supported by timesheet records completed by individual employees.; Cause and possible asserted effect: The control over authorization of timesheets was not operating consistently.; Identification of questioned costs and how they were computed: None; Sample Statistically Valid: The sample was not intended to be, and was not, a statistically valid sample.; Repeat finding from prior year: This finding is not a repeat of a finding in the immediately prior audit.; Recommendation: We recommend that management enhance their control process to ensure it is applied consistently.; Views of Responsible Officials: The Organization agrees with the condition reported. Asante is working on implementing an improved control process for timely review of employee timecards to ensure allowable costs are being charged to Federal grant programs. The improved control process is expected to be implemented by the end of the fiscal year. During the height of COVID some routine responsibilities, such as timecard approval, were given less attention than the new requirements related to the pandemic. As the State of Emergency eases attention can be returned to routine tasks.