PACIFIC RETIREMENT SERVICES, INC. AND AFFILIATES

Finding 2022-001 Unallowed Cost Federal Agency: U.S. Department of Health and Human Services Federal Program Title: COVID-19 Provider Relief Fund Program Program Assistance Listing Number: 93.498 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Unallowed Cost Criteria or specific requirement: 2 CFR Part 200 Uniform Guidance Condition: The auditor tested a sample of 60 transactions. One exception was identified where the expense was not an eligible expense under the program. Questioned Cost: $650 Context: Although one of the supporting transactions listed was an unallowed cost, the organization had unreimbursed expenses in excess of the $650 that were qualifying expenses. Therefore the amount reported on the schedule of expenditures of federal awards is correct. Cause: The transaction was a nonrecurring expense that was supported by an invoice referring to COVID-19. Effect: The supporting list of transactions for amount of expenses reported and included on the schedule of expenditures of federal awards included an unallowed cost. Recommendation: The organization should update their supporting schedule of transactions to remove the unallowed cost and include an allowed cost from the list of unreimbursed transactions so that the support for the total amount on the schedule of expenditures of federal awards is supported by a list of transactions that does not include an unallowed cost. Views of responsible officials: There is no disagreement with the audit finding.

The organization will update their supporting schedule of transactions to remove the unallowed cost and include an allowed cost from the list of unreimbursed transactions so that the support for the total amount on the schedule of expenditures of federal awards is supported by a list of transactions that does not include an unallowed cost.