Institutional Federal Compliance Report 2021

STATE OF NEW YORK

Schedule of Findings and Questioned Costs

Year ended March 31, 2018

Federal Agency:

U.S. Department of Health and Human Services

Federal Program:

Basic Health Program (Affordable Care Act) (93.640)

Federal Award Numbers:

BHPFFY2016-17

Federal Award Years:

2016 and 2017

State Agency:

Department of Health

Reference:

2018-029

Criteria Title 42 U.S. Code of Federal Regulations Part 600 (42 CFR 600), Administration, Eligibility, Essential Health Benefits, Performance Standards, Service Delivery Requirements, Premium and Cost Sharing Allotments, and Reconciliation , section 600.710(a) requires the Basic Health Plan (BHP) administering agency to maintain an accounting system and supporting fiscal records to assure that the BHP trust funds are maintained and expended in accord with applicable Federal Requirements. Title 45 U.S. Code of Federal Regulations Part 75 (45 CFR 75), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, section 75.303 also states the non-Federal 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. Condition Prior to October 2017, the Department of Health (the Department) did not have a process, including appropriate internal controls in place to track cash returned from providers related to the Basic Health Program (Affordable Care Act) (BHP). Cash returned from providers was deposited into an escrow account, and the Department did not apply the escrow funds against subsequent BHP trust fund expenditures. Further, the Department did not identify interest earned on BHP funds maintained in the Department’s escrow account, which should have been applied against BHP expenditures. As of October 2017, the Department implemented an oversight procedure to track and calculate the interest earned on the cash returned for BHP. Cause The Department attributed the cause of the condition found was due to a lack of a process, including monitoring controls in place to identify the track recouped funds returned from providers initially funded through the BHP’s trust funds. As of October 2017, the Department implemented a weekly oversight procedure to identify recoveries and calculate associated interested. Possible Asserted Effect Failure to adequately monitor and track BHP’s trust funds recouped could result BHP’s trust funds being utilized for unallowable costs inconsistent with the laws, regulations, and terms and conditions of grant agreements being claimed to Federal programs.

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