FAC Explorer

Audit 14986

FY End
2023-06-30
Total Expended
$40.07M
Findings
12
Programs
2
Organization: Cumberland Memorial Hospital, Inc. (WI)
Year: 2023 Accepted: 2024-02-01
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
11176 2023-001 Material Weakness Yes ABHLN
11177 2023-002 Material Weakness Yes ABHLN
11178 2023-003 Material Weakness Yes ABHLN
11179 2023-001 Material Weakness Yes ABHLN
11180 2023-002 Material Weakness Yes ABHLN
11181 2023-003 Material Weakness Yes ABHLN
587618 2023-001 Material Weakness Yes ABHLN
587619 2023-002 Material Weakness Yes ABHLN
587620 2023-003 Material Weakness Yes ABHLN
587621 2023-001 Material Weakness Yes ABHLN
587622 2023-002 Material Weakness Yes ABHLN
587623 2023-003 Material Weakness Yes ABHLN

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $34.99M Yes 3
93.498 Provider Relief Fund $582,907 - 0

Contacts

Name Title Type
XZNBV6B3YJ75 Angie Martens Auditee
7158227254 Paul Traczek Auditor
No contacts on file

Notes to SEFA

Title: Note 1: Basis of Presentation Accounting Policies: With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (“Schedule”) includes the federal award activity of Cumberland Memorial Hospital, Inc. d/b/a Cumberland Healthcare (the “Organization”). 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 (the “Uniform Guidance”). Because the schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Note 2: Summary of Significant Accounting Policies Accounting Policies: With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023.
Title: Note 3: Indirect Cost Accounting Policies: With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 4: Subrecipients Accounting Policies: With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization passed no federal awards through to subrecipients.
Title: Note 5: Balance of Outstanding Loans Accounting Policies: With the exception of expenditures related to the Provider Relief Fund (“PRF”), expenditures on the Schedule are reported on the accrual basis of accounting and 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 PRF is not subject to cost principles requirements contained in the Uniform Guidance. Expenditures reported on the Schedule for PRF are based on the PRF period of availability, terms and conditions of the PRF program, and amounts reported in the PRF portal for the various reporting periods with due dates through March 31, 2023. De Minimis Rate Used: N Rate Explanation: The Organization has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The loan balances outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule, except for any new loans which were issued during the year. There was one new loan received during the year ending June 30, 2023 for $34,985,200 which was a direct loan from the U.S. Department of Agriculture (“USDA”), Rural Development, as a Community and Facilities program loan which was utilized to refinance a previous bond issue by the Hospital to fund construction of a replacement hospital and clinic facility. The other community and facilities loan presented in the schedule represents the guaranteed balance by USDA under a similar program for additional long-term debt utilizes in the same replacement hospital construction project. See the Notes to the SEFA for chart/table

Finding Details

Finding 2023-001
Condition – Cumberland Memorial Hospital, Inc. d/b/a Cumberland Healthcare’s (the “Hospital”) internal control over financial reporting does not end at the general ledger but extends to the financial statements and notes. As part of our professional services for the year ended June 30, 2023, we were requested to draft the financial statements and accompanying notes to the financial statements. It is the responsibility of management and those charged with governance to make the decision about whether to accept the degree of risk associated with this condition because of cost or other considerations. Because the Hospital relies on Wipfli LLP to provide the necessary understanding of current accounting and disclosure principles in the preparation of the financial statements and notes, a material weakness exists in the Hospital’s internal controls. This is a repeat finding from 2022, Finding 2022.001. Criteria – Government Auditing Standards consider the inability to report financial data reliably in accordance with GAAP to be an internal control deficiency. Effect – The completeness of the financial statement disclosures and the accuracy of the overall financial presentation may be negatively impacted, since outside auditors do not have the same comprehensive understanding of the Hospital as its internal staff. Recommendation – We recommend management and those charged with governance continue to evaluate whether to accept the degree of risk associated with this condition because of cost or other considerations. Management’s Response – The Hospital does not have the resources and staff to prepare the financial statements and notes but will continue to oversee the auditor’s services and review and approve the financial statements and notes.
Finding 2023-002
Finding 2023.002–Segregation of Duties Condition – The size of the Hospital’s staff in charge of accounting and reporting precludes a proper segregation of duties to ensure adequate internal controls. The basic premise is that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction. The following segregation of duties issues were noted during the audit:
Finding 2023-003
Condition – During our audit, Wipfli LLP proposed a number of adjusting journal entries. Although the net impact of the adjustments to the financial statements only resulted in a reduction in the decrease in net assets reported of approximately $651,000, there were still a number of material adjustments which net to this overall change amount. The adjusting journal entries were based on financial calculations and audit procedures performed by Wipfli LLP that were not performed during the Hospital’s normal financial close process. Since the Hospital’s internal control did not discover these adjustments prior to our audit, a material weakness exists in the Hospital’s controls. This is a repeat finding from 2022, Finding 2022.003. Criteria – Material adjusting journal entries not prepared by the Hospital are considered to be an internal control weakness. Effect – Proper recording and reporting of financial information may not occur in a timely manner. Recommendation – We recommend that all accounts be reconciled and adjustments be posted to the accounting records on a quarterly basis, at a minimum. Management’s Response – The Hospital will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditors.
Finding 2023-001
Condition – Cumberland Memorial Hospital, Inc. d/b/a Cumberland Healthcare’s (the “Hospital”) internal control over financial reporting does not end at the general ledger but extends to the financial statements and notes. As part of our professional services for the year ended June 30, 2023, we were requested to draft the financial statements and accompanying notes to the financial statements. It is the responsibility of management and those charged with governance to make the decision about whether to accept the degree of risk associated with this condition because of cost or other considerations. Because the Hospital relies on Wipfli LLP to provide the necessary understanding of current accounting and disclosure principles in the preparation of the financial statements and notes, a material weakness exists in the Hospital’s internal controls. This is a repeat finding from 2022, Finding 2022.001. Criteria – Government Auditing Standards consider the inability to report financial data reliably in accordance with GAAP to be an internal control deficiency. Effect – The completeness of the financial statement disclosures and the accuracy of the overall financial presentation may be negatively impacted, since outside auditors do not have the same comprehensive understanding of the Hospital as its internal staff. Recommendation – We recommend management and those charged with governance continue to evaluate whether to accept the degree of risk associated with this condition because of cost or other considerations. Management’s Response – The Hospital does not have the resources and staff to prepare the financial statements and notes but will continue to oversee the auditor’s services and review and approve the financial statements and notes.
Finding 2023-002
Finding 2023.002–Segregation of Duties Condition – The size of the Hospital’s staff in charge of accounting and reporting precludes a proper segregation of duties to ensure adequate internal controls. The basic premise is that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction. The following segregation of duties issues were noted during the audit:
Finding 2023-003
Condition – During our audit, Wipfli LLP proposed a number of adjusting journal entries. Although the net impact of the adjustments to the financial statements only resulted in a reduction in the decrease in net assets reported of approximately $651,000, there were still a number of material adjustments which net to this overall change amount. The adjusting journal entries were based on financial calculations and audit procedures performed by Wipfli LLP that were not performed during the Hospital’s normal financial close process. Since the Hospital’s internal control did not discover these adjustments prior to our audit, a material weakness exists in the Hospital’s controls. This is a repeat finding from 2022, Finding 2022.003. Criteria – Material adjusting journal entries not prepared by the Hospital are considered to be an internal control weakness. Effect – Proper recording and reporting of financial information may not occur in a timely manner. Recommendation – We recommend that all accounts be reconciled and adjustments be posted to the accounting records on a quarterly basis, at a minimum. Management’s Response – The Hospital will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditors.
Finding 2023-001
Condition – Cumberland Memorial Hospital, Inc. d/b/a Cumberland Healthcare’s (the “Hospital”) internal control over financial reporting does not end at the general ledger but extends to the financial statements and notes. As part of our professional services for the year ended June 30, 2023, we were requested to draft the financial statements and accompanying notes to the financial statements. It is the responsibility of management and those charged with governance to make the decision about whether to accept the degree of risk associated with this condition because of cost or other considerations. Because the Hospital relies on Wipfli LLP to provide the necessary understanding of current accounting and disclosure principles in the preparation of the financial statements and notes, a material weakness exists in the Hospital’s internal controls. This is a repeat finding from 2022, Finding 2022.001. Criteria – Government Auditing Standards consider the inability to report financial data reliably in accordance with GAAP to be an internal control deficiency. Effect – The completeness of the financial statement disclosures and the accuracy of the overall financial presentation may be negatively impacted, since outside auditors do not have the same comprehensive understanding of the Hospital as its internal staff. Recommendation – We recommend management and those charged with governance continue to evaluate whether to accept the degree of risk associated with this condition because of cost or other considerations. Management’s Response – The Hospital does not have the resources and staff to prepare the financial statements and notes but will continue to oversee the auditor’s services and review and approve the financial statements and notes.
Finding 2023-002
Finding 2023.002–Segregation of Duties Condition – The size of the Hospital’s staff in charge of accounting and reporting precludes a proper segregation of duties to ensure adequate internal controls. The basic premise is that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction. The following segregation of duties issues were noted during the audit:
Finding 2023-003
Condition – During our audit, Wipfli LLP proposed a number of adjusting journal entries. Although the net impact of the adjustments to the financial statements only resulted in a reduction in the decrease in net assets reported of approximately $651,000, there were still a number of material adjustments which net to this overall change amount. The adjusting journal entries were based on financial calculations and audit procedures performed by Wipfli LLP that were not performed during the Hospital’s normal financial close process. Since the Hospital’s internal control did not discover these adjustments prior to our audit, a material weakness exists in the Hospital’s controls. This is a repeat finding from 2022, Finding 2022.003. Criteria – Material adjusting journal entries not prepared by the Hospital are considered to be an internal control weakness. Effect – Proper recording and reporting of financial information may not occur in a timely manner. Recommendation – We recommend that all accounts be reconciled and adjustments be posted to the accounting records on a quarterly basis, at a minimum. Management’s Response – The Hospital will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditors.
Finding 2023-001
Condition – Cumberland Memorial Hospital, Inc. d/b/a Cumberland Healthcare’s (the “Hospital”) internal control over financial reporting does not end at the general ledger but extends to the financial statements and notes. As part of our professional services for the year ended June 30, 2023, we were requested to draft the financial statements and accompanying notes to the financial statements. It is the responsibility of management and those charged with governance to make the decision about whether to accept the degree of risk associated with this condition because of cost or other considerations. Because the Hospital relies on Wipfli LLP to provide the necessary understanding of current accounting and disclosure principles in the preparation of the financial statements and notes, a material weakness exists in the Hospital’s internal controls. This is a repeat finding from 2022, Finding 2022.001. Criteria – Government Auditing Standards consider the inability to report financial data reliably in accordance with GAAP to be an internal control deficiency. Effect – The completeness of the financial statement disclosures and the accuracy of the overall financial presentation may be negatively impacted, since outside auditors do not have the same comprehensive understanding of the Hospital as its internal staff. Recommendation – We recommend management and those charged with governance continue to evaluate whether to accept the degree of risk associated with this condition because of cost or other considerations. Management’s Response – The Hospital does not have the resources and staff to prepare the financial statements and notes but will continue to oversee the auditor’s services and review and approve the financial statements and notes.
Finding 2023-002
Finding 2023.002–Segregation of Duties Condition – The size of the Hospital’s staff in charge of accounting and reporting precludes a proper segregation of duties to ensure adequate internal controls. The basic premise is that no one employee should have access to both physical assets and the related accounting records or to all phases of a transaction. The following segregation of duties issues were noted during the audit:
Finding 2023-003
Condition – During our audit, Wipfli LLP proposed a number of adjusting journal entries. Although the net impact of the adjustments to the financial statements only resulted in a reduction in the decrease in net assets reported of approximately $651,000, there were still a number of material adjustments which net to this overall change amount. The adjusting journal entries were based on financial calculations and audit procedures performed by Wipfli LLP that were not performed during the Hospital’s normal financial close process. Since the Hospital’s internal control did not discover these adjustments prior to our audit, a material weakness exists in the Hospital’s controls. This is a repeat finding from 2022, Finding 2022.003. Criteria – Material adjusting journal entries not prepared by the Hospital are considered to be an internal control weakness. Effect – Proper recording and reporting of financial information may not occur in a timely manner. Recommendation – We recommend that all accounts be reconciled and adjustments be posted to the accounting records on a quarterly basis, at a minimum. Management’s Response – The Hospital will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditors.