DALLAM HARTLEY COUNTIES HOSPITAL DISTRICT

Allowable Costs/Activities Allowed - U.S. Department of Health and Human Services Federal Award: COVID-19 - Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution - Period 4 CFDA #93.498 Condition - The District reported salary expense in the Period 4 Provider Relief Funds (PRF) report that could not be substantiated with sufficient appropriate audit evidence. Criteria - In accordance with the HHS Post-Payment Notice of Reporting Requirements released by the Health Resources and Services Administrations (HRSA), costs associated with responding to the coronavirus, such as personnel expenses, can be reimbursed using PRF payments, and must be reported in compliance with 45 CFR Part 75, which requires sufficient appropriate audit evidence to be provided during the course of an audit. Cause - It was noted during participant data and payroll testing that the participant’s personnel files did not contain current pay rate documentation supporting the salary expense for each employee reported in the Period 4 PRF report when claiming PRF reimbursement. Effect - Management was unable to provide current pay rate documentation for the salary of 2 out of 35 employees tested, with a known questioned cost of $1,162. After projecting the exception rate to the salary expense population, a likely questioned cost of $34,904 was identified. Questioned Cost - Known questioned costs of $1,162 and likely questioned costs of $34,904 Recommendation - Maintaining current personnel files is an important internal control. Complete and current personnel files should be established and maintained for each employee. All documentation should be stored in a safe location and filed in an organized manner. These procedures will help ensure that the District can produce accurate documentation for expenditures in a timely manner in the future. Views of Responsible Officials and Planned Corrective Actions - DHCHD has contracted with another payroll provider. Human Resources staff with work with the payroll provider to ensure that appropriate documentation regarding pay amounts and other essential payroll and personnel data is maintained on each employee.