Title: 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 auditee did not use the de minimis cost rate.
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Morrison Community Hospital District and the Morrison Community Hospital Foundation (collectively, the Hospital) 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). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the financial statements.
For purposes of the Schedule, federal awards include all federal assistance entered into directly between the Hospital and the federal government and sub-awards from nonfederal organizations made under federally sponsored agreements. The Schedule does not include payments received under Medicare and Medicaid reimbursement programs. Because the Schedule presents only a selected portion of the activities of the Hospital, it is not intended to, and does not, present the net position, changes in net position or cash flows of the Hospital.
Title: Noncash Assistance, Insurance, Loans and Loan Guarantees Outstanding
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 auditee did not use the de minimis cost rate.
There were $23,200,000 of Secured Rural American Bonds originally issued comprised of USDA direct loans and loan guarantees. These bonds were issued for the construction and expansion of the hospital facilities. The $23,200,000 original bonds are comprised of $4,000,000 of Series 2019A and Series 2019B Secured Rural American Bonds (USDA Guaranteed loan) and $19,200,000 of Rural Development Bonds (direct USDA loan). The outstanding amount of the USDA direct and guaranteed loans is $22,690,102 as of June 30, 2023, and the bonds mature at various dates through September 2049. The direct USDA loan matures in June 2056.
Title: Provider Relief Fund
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 auditee did not use the de minimis cost rate.
Under the terms and conditions of the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF) (ALN 93.498), the Organization is required to report COVID-19 related expenses and lost revenue to the U.S. Department of Health and Human Services (HHS). Guidance from HHS has required the reporting of the COVID-19 related expenses and lost revenue in certain reporting periods based on when the funds were received.
The June 30, 2023 Schedule includes PRF expenditures of $589,919. Distributions of $589,919 were received by the Hospital from July 1, 2021 to June 30, 2022.
The Organization recognized $129,244 of the distribution received as revenue in its June 30, 2023 financial statements and $460,675 as revenue in its June 30, 2022 financial statements, as the terms and conditions of the PRF grant were satisfied. HHS requires PRF amounts received from July 1, 2021 to June 30, 2022 to be reported on the June 30, 2023 Schedule rather than the June 30, 2022 Schedule.