Nine of Thirty Selected Assisted Living Facilities Did Not Comply With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments

Why OIG Did This Audit

• Congress appropriated $178 billion to HHS to provide funds to eligible providers for health care-related expenses or lost revenues attributable to COVID-19 under the Provider Relief Fund (PRF) program. HHS was responsible for initial PRF program oversight and policy decisions, and HRSA administered the PRF program.
• Providers receiving PRF payments were to ensure that the payments were: (1) used to prevent, prepare for, or respond to COVID-19; (2) used for health care-related expenses or lost revenues attributable to COVID-19; (3) not used to cover expenses or losses reimbursed by other funding sources; and (4) not used to pay salaries in excess of a certain threshold or to pay for certain prohibited activities.
• This audit is part of a series reviewing PRF payments to various provider types. Specifically, this audit assessed whether 30 selected assisted living facilities (ALFs) expended taxpayer funds in accordance with Federal and program requirements.

What OIG Found

• Of the 30 selected ALFs we reviewed, 7 ALFs claimed a total of $283,000 in unallowable PRF expenditures, and 2 ALFs inaccurately reported $11 million in lost revenues. These nine ALFs received a total of $25.6 million in PRF payments. The remaining ALFs used PRF funds for allowable expenditures and lost revenues.
• These deficiencies occurred because although ALFs attested to the PRF terms and conditions and HRSA provided continuously updated guidance to PRF recipients, the ALFs made clerical errors in their reporting of expenditures and did not always correctly interpret HRSA guidance, maintain documentation to support reported expenditures, or have procedures to verify the accuracy of lost revenue calculations.

What OIG Recommends

We made two recommendations to HRSA, including that it require the selected ALFs to return any unallowable expenditures and lost revenue amounts to the Federal Government or ensure that the ALFs properly account for these expenditures and lost revenues. HRSA concurred with our recommendations.