SOUTHERN MONTEREY COUNTY MEMORIAL HOSPITALNon-Profit

FINDING 2021-001 ? REPORTING: SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE "See Schedule of Findings and Questioned Costs for chart/table" Criteria: The Hospital should have appropriate internal controls in place to ensure that reporting requirements are met and amounts utilized in reports are calculated accurately and in accordance with 45 CFR 75.342. Condition and Context: The Period 1 Provider Relief Fund (?PRF?) report submitted during the year ended September 30, 2021, was tested. The Hospital elected to use Lost Revenues Option 1 to report lost revenue based on quarterly actuals. Amounts reported for each quarter were not calculated accurately. For each quarter reported, the Hospital utilized their gross patient service revenue instead of the net patient service revenue. This resulted in revenue amounts on the report to be inaccurate and overstated. Cause: PRF guidance was not thoroughly reviewed and researched. Effect: Errors were made in the reporting quarterly Total Revenue/Net Charges from Patient Care on the period 1 PRF report. However, we note there was no impact to total funding received or retained by the Hospital due to the error. Independent calculations of the lost revenue utilizing the amounts that should have been reported were performed and accurately reported on the period 2 PRF reporting. Based on these calculations, lost revenue exceeded total PRF amounts received in period 1. The total amount of funding recognized on the basis of lost revenue for period 1 was accurate and the amount reported per the Schedule of Expenditures of Federal Awards (?SEFA?) was also accurate. Repeat Finding: This is not a repeat finding. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Review controls should be in place by someone other than the preparer of the report to ensure information is accurate prior to submission of the report. Management?s Response and Corrective Actions: Mee Memorial Healthcare System has corrected the revenue calculation error in period 2 PRF reporting. In addition, there was no impact to total funding received or retained due to the reporting error. The CFO has the revenue reporting error in period 2 of the PRF reporting. Correction was done on the PRF reporting portal as of March 31, 2022.