FAC Explorer

Audit 13626

FY End
2023-08-31
Total Expended
$16.35M
Findings
4
Programs
2
Organization: Rannie Webster Foundation (NH)
Year: 2023 Accepted: 2024-01-25
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
9986 2023-001 Significant Deficiency - N
9987 2023-002 Significant Deficiency Yes L
586428 2023-001 Significant Deficiency - N
586429 2023-002 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.129 Mortgage Insurance_nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities $15.99M Yes 2
93.498 Provider Relief Fund $357,203 - 0

Contacts

Name Title Type
FJBFS94BTNM1 Janet Langlois Auditee
6035894111 Tara Connor Auditor
No contacts on file

Notes to SEFA

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 Foundation has not elected to use the 10% 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 Rannie Webster Foundation (the Foundation), HUD Project No. 024-22112, under programs of the federal government for the year ended August 31, 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 Foundation, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Foundation.
Title: 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 Foundation has not elected to use the 10% 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. The Foundation has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Ending Balance 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 Foundation has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The loan agreement fully insured by the U.S. Department of Housing and Urban Development (HUD) under Section 232, had an outstanding balance of $15,713,269 at August 31, 2023.
Title: Reconciliation to financial statements 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 Foundation has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The financial statements reflect revenue recognized from Provider Relief Fund (PRF) and American Rescue Plan (ARP) of $-0- and $507,000 for the years ended August 31, 2023 and 2022, respectively. The Schedule of Expenditures of Federal Awards includes PRF of $348,843 and ARP of $8,289 received in Period 4, along with interest earned on Period 4 PRF and ARP funds of $70 and $1, respectively, in accordance with the requirements of the compliance supplement for assistance listing number 93.498.

Finding Details

Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria or specific requirement: Bank statements shall be reconciled promptly to the formal accounting records by persons other than those recording or handling cash, or preparing and signing checks. Condition: There is a lack of segregation of duties surrounding cash management. Context: During our testing, we noted that bank reconciliations were prepared promptly, however, there is a lack of segregation of duties. The person preparing the bank reconciliations also has the ability to receive incoming cash, take deposits to the bank, and generate checks. Additionally, there is no review performed for bank reconciliations. Cause: The entity has a small finance department. Effect: Error(s) or fraud could occur and result in noncompliance. Recommendation: The person preparing the bank reconciliations should not have the ability to handle and record cash. When segregation of duties is not possible, compensating controls should be put into place. Review of bank reconciliations should also be completed on a monthly basis. Views of responsible officials: Management is in agreement with the finding.
Finding 2023-002
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Rannie Webster Foundation’s Regulatory Agreement with HUD requires the Foundation to maintain a debt service coverage ratio of 1.0. Condition: Rannie Webster Foundation’s debt service coverage ratio was calculated as below 1.0. Questioned costs: None Context: Rannie Webster Foundation’s debt service coverage ratio was calculated as below the requirement of 1.0. Cause: Rannie Webster Foundation experienced higher costs as a result of overall economic conditions and higher costs on contracted nursing services in the wake of healthcare hiring challenges. Effect: This may be considered a project operating deficiency by HUD. HUD may provide the Foundation with written notice that the Foundation must select and engage (at the Foundation’s expense), within ten business days of such notice, the services of a management consultant. HUD’s decision to require or not require the engagement of a consultant is within HUD’s sole discretion. Repeat finding: This is a repeat finding and was reported as finding 2022-02 in the prior year. Recommendation: Management should evaluate and consider cost-cutting measures or strategies to improve the financial results. Views of responsible officials: Management is in agreement with the finding.
Finding 2023-001
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria or specific requirement: Bank statements shall be reconciled promptly to the formal accounting records by persons other than those recording or handling cash, or preparing and signing checks. Condition: There is a lack of segregation of duties surrounding cash management. Context: During our testing, we noted that bank reconciliations were prepared promptly, however, there is a lack of segregation of duties. The person preparing the bank reconciliations also has the ability to receive incoming cash, take deposits to the bank, and generate checks. Additionally, there is no review performed for bank reconciliations. Cause: The entity has a small finance department. Effect: Error(s) or fraud could occur and result in noncompliance. Recommendation: The person preparing the bank reconciliations should not have the ability to handle and record cash. When segregation of duties is not possible, compensating controls should be put into place. Review of bank reconciliations should also be completed on a monthly basis. Views of responsible officials: Management is in agreement with the finding.
Finding 2023-002
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities Assistance Listing Number: 14.129 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Rannie Webster Foundation’s Regulatory Agreement with HUD requires the Foundation to maintain a debt service coverage ratio of 1.0. Condition: Rannie Webster Foundation’s debt service coverage ratio was calculated as below 1.0. Questioned costs: None Context: Rannie Webster Foundation’s debt service coverage ratio was calculated as below the requirement of 1.0. Cause: Rannie Webster Foundation experienced higher costs as a result of overall economic conditions and higher costs on contracted nursing services in the wake of healthcare hiring challenges. Effect: This may be considered a project operating deficiency by HUD. HUD may provide the Foundation with written notice that the Foundation must select and engage (at the Foundation’s expense), within ten business days of such notice, the services of a management consultant. HUD’s decision to require or not require the engagement of a consultant is within HUD’s sole discretion. Repeat finding: This is a repeat finding and was reported as finding 2022-02 in the prior year. Recommendation: Management should evaluate and consider cost-cutting measures or strategies to improve the financial results. Views of responsible officials: Management is in agreement with the finding.