Wallowa County Health Care DistrictLocal Government

2021-001 Department of Health and Human Services Federal Financial Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Costs were claimed under the program which were incurred prior to when the District was preparing for COVID-19. Cause: There was not documentation to support that these costs were used to prepare for, prevent, or respond to COVID-19. The District?s internal control procedures did not identify that these expenditures were incurred prior to preparing for, preventing or responding to COVID-19. Effect: The District claimed expenses that were not eligible under the terms of the grant. Questioned Costs: None reported. The total amount reported that should have been excluded was $141,078 related to costs prior to COVID-19 preparation. However, the Period 1 report included approximately $929,205 of unreimbursed general and administrative expenses relating to the reporting period, which was included in the population for testing, and resulted in sufficient expenses incurred attributable to COVID-19. As a result, there are no questioned costs for activities allowed or unallowed and allowable costs/cost principles. Context/Sampling: A nonstatistical sample of 60 ($15,726) out of a population greater than 250 transactions relating to general and administrative and healthcare related expenses, including mortgage/rent, personnel, fringe benefits, lease payments, utilities, supplies, equipment, information technology, and facilities ($4,282,001) were tested. There were 5 expenditures identified in the sample that were prior to when the entity began to prepare for, prevent and respond to COVID-19. The client?s listing was then used to determine the total amount of these expenses of $141,078. Additional items were then tested from the Total Unreimbursed Expenses Attributable to Coronavirus line item. Repeat Finding from Prior Years: No Recommendation: We recommend the District review the period of time in which the entity was preparing for and responding to COVID-19. Views of Responsible Officials: Management agrees with the finding.