Audit 11646

FY End
2023-06-30
Total Expended
$3.98M
Findings
2
Programs
1

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
8600 2023-001 Significant Deficiency - P
585042 2023-001 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $3.98M Yes 1

Contacts

Name Title Type
FNA2MNGGUJP5 Staci Williams Auditee
8702397855 Kade Moody Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Medical Center has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of the Arkansas Methodist Hospital Corporation and Subsidiaries d/b/a Arkansas Methodist Medical Center ("the Medical Center") under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of the Medical Center, it is not intended to and does not present the financial position, changes in net positions, or cash flows of the Medical Center.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Medical Center has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note 3. Indirect Cost Rate Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Medical Center has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Medical Center has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note 4. Subsidiaries Not Included in the Schedule Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Medical Center has not elected to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. Arkansas Methodist Medical Center Retirement Community, Inc. d/b/a Chateau on the Ridge, is a subsidiary of the Medical Center; however, their federal awards are not included in the Schedule. This entity is regulated by the U.S. Department of Housing and Urban Development and, as such, is required to undergo a separate individual single audit. The federal awards expensed by this fund and reported in the respective schedule of expenditures of federal awards for the year ended June 30, 2023 are as follows: CFDA Number Program Name Federal Expenditures Chateau on the Ridge 14.129 Mortgage Insurance Nursing Homes, Intermediate Care Facilities Board and Care Homes and Assisted Living Facilities (Section 232) $ 8,617,293

Finding Details

Section II – Financial Statement Findings Finding No. 2023-001, Significant Deficiency – Cash Reconciliation Criteria: The Medical Center must ensure timely and proper reconciliation of cash accounts in order to ensure there is no misappropriation of assets or errors in monthly financial reporting, particularly as it relates to the Medical Center's cash position. Condition: During the period under audit, due primarily to the Medical Center being short staffed, several bank accounts were not reconciled, and variances were not resolved in a timely manner. Cause: Insufficient staff performing accounting duties and current staff overwhelmed with volume of work. Effect: Deficiencies in controls over this significant process increase risk of financial reporting misstatements which can lead to limiting an entity’s ability to rely on financial data for critical decision making. Questioned costs: None. Identification as a repeat finding: Not applicable. Auditor’s Recommendation: HORNE recommends the Medical Center hire additional staff, permitting accounting job functions such as account reconciliations to be performed timely. HORNE recommends the Medical Center have a set policy to define the job duties for performing the reconciliation, the related review and approval with proper segregation of duties. Auditee’s Response: The Medical Center is working on hiring another individual to aid the accounting processes such as bank reconciliations.
Section II – Financial Statement Findings Finding No. 2023-001, Significant Deficiency – Cash Reconciliation Criteria: The Medical Center must ensure timely and proper reconciliation of cash accounts in order to ensure there is no misappropriation of assets or errors in monthly financial reporting, particularly as it relates to the Medical Center's cash position. Condition: During the period under audit, due primarily to the Medical Center being short staffed, several bank accounts were not reconciled, and variances were not resolved in a timely manner. Cause: Insufficient staff performing accounting duties and current staff overwhelmed with volume of work. Effect: Deficiencies in controls over this significant process increase risk of financial reporting misstatements which can lead to limiting an entity’s ability to rely on financial data for critical decision making. Questioned costs: None. Identification as a repeat finding: Not applicable. Auditor’s Recommendation: HORNE recommends the Medical Center hire additional staff, permitting accounting job functions such as account reconciliations to be performed timely. HORNE recommends the Medical Center have a set policy to define the job duties for performing the reconciliation, the related review and approval with proper segregation of duties. Auditee’s Response: The Medical Center is working on hiring another individual to aid the accounting processes such as bank reconciliations.