Audit 26432

FY End
2022-06-30
Total Expended
$23.30M
Findings
2
Programs
2
Year: 2022 Accepted: 2023-08-09

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
20427 2022-001 Significant Deficiency Yes L
596869 2022-001 Significant Deficiency Yes L

Contacts

Name Title Type
FJX5R8LEJFU3 Arnold Heinemann Auditee
8455796503 Don Faul Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The expenditures reported in this Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the Uniform Guidance, wherein certain typesof expenditures are not allowable or are limited as to reimbursement. Some amounts presented inthe Schedule may differ from amounts presented in, or used in the preparation of, the basicfinancial statements. De Minimis Rate Used: N Rate Explanation: Caring Heart Rehabilitation and Nursing Center, Inc., Project No. 034-22108, has elected not touse the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal loan guarantee program listed subsequently is administered directly by Caring HeartRehabilitation and Nursing Center, Inc., Project No. 034-22108, and balances and transactionsrelating to this program are included in Caring Heart Rehabilitation and Nursing Center, Inc.,Project No. 034-22108s basic financial statements. The balance of the loan outstanding as ofJune 30, 2022, consists of: U.S. Department of Housing and Urban Development - Mortgage Insurance Nursing Homes,Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Federal A.L. Number 14.129 Amount Outstanding as of June 30, 2022 $22,083,589
Title: Basis of presentation Accounting Policies: The expenditures reported in this Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the Uniform Guidance, wherein certain typesof expenditures are not allowable or are limited as to reimbursement. Some amounts presented inthe Schedule may differ from amounts presented in, or used in the preparation of, the basicfinancial statements. De Minimis Rate Used: N Rate Explanation: Caring Heart Rehabilitation and Nursing Center, Inc., Project No. 034-22108, has elected not touse the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditure of Federal Awards (the Schedule) includes thefederal awards activity of Caring Heart Rehabilitation and Nursing Center, Inc., Project No. 034-22108 under federal programs for the year ended June 30, 2022. The information in thisSchedule is presented in accordance with the requirements of Title 2 U.S. Code of FederalRegulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance). Because the Schedule presents only aselect portion of the operations of Caring Heart Rehabilitation and Nursing Center, Inc., ProjectNo. 034-22108, it is not intended to, and does not, present the financial position, changes in netassets, or cash flows of Caring Heart Rehabilitation and Nursing Center, Inc., Project No. 034-22108.
Title: Relationship to the basic financial statements Accounting Policies: The expenditures reported in this Schedule are reported on the accrual basis of accounting. Suchexpenditures are recognized following, as applicable, either the cost principles in OMB Circular A-122, Cost Principles for Non-Profit Organizations, or the Uniform Guidance, wherein certain typesof expenditures are not allowable or are limited as to reimbursement. Some amounts presented inthe Schedule may differ from amounts presented in, or used in the preparation of, the basicfinancial statements. De Minimis Rate Used: N Rate Explanation: Caring Heart Rehabilitation and Nursing Center, Inc., Project No. 034-22108, has elected not touse the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Under terms and conditions of the Provider Relief Funds (PRF) under the Coronavirus Aid,Relief, and Economic Security (CARES) Act, Caring Heart Rehabilitation and Nursing Center,Inc. is required to report COVID-19 related expenses and lost revenue to the U.S. Department ofHealth and Human Services (HHS). Guidance from HHS has required the reporting of theCOVID-19 related expenses and lost revenue in certain reporting periods based on when fundswere received.As required by HHS, the 2022 Schedule includes PRF of approximately $435,100, which wasreceived by Caring Heart and Rehabilitation and Nursing Center, Inc. prior to June 30, 2022.Caring Heart Rehabilitation and Nursing Center, Inc. recognized as grant income in its statementsof operations and changes in net assets (deficit) for the years ending June 30, 2022 and 2021,$594,789 and $1,108,744, respectively, as the terms and conditions of the PRF grants, weresatisfied by Caring Heart Rehabilitation and Nursing Center, Inc. representing all of the PRFreceived over the two-year period.

Finding Details

Criteria or Specific Requirement -Projects are required to ensure that financial status reports are presented in accordance with the terms of the applicable agreement between the Project and HUD. Condition -As part of our audit procedures, we determined that the Project did not comply with HUD?s annual filing requirement prior to the deadline. Context -Audited financial statements are due to HUD and REAC no later than 90 days after the fiscal year end. Questioned Cost - None.Cause - Due to turnover in personnel, filings were not completed timely Effect - Untimely financial reporting. Recommendation - The Project should implement policies and procedures to ensure that annual financial reports are filed prior to deadlines. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and will implement policies and procedures to ensure that this problem does not recur. Please refer to the corrective action plan. As a result of COVID curtailments and a resulting national staffing shortage in the accounting profession, there were challenges to completing the 2022 and 2021 annual filing requirements prior to the deadline. Management has reviewed staffing and monthly and annual close project plans to verify that staffing and plans to issue and furnish annual financial statements timely are sufficient. The Project plans on being back in compliance for the year ending June 30, 2023, requirements.
Criteria or Specific Requirement -Projects are required to ensure that financial status reports are presented in accordance with the terms of the applicable agreement between the Project and HUD. Condition -As part of our audit procedures, we determined that the Project did not comply with HUD?s annual filing requirement prior to the deadline. Context -Audited financial statements are due to HUD and REAC no later than 90 days after the fiscal year end. Questioned Cost - None.Cause - Due to turnover in personnel, filings were not completed timely Effect - Untimely financial reporting. Recommendation - The Project should implement policies and procedures to ensure that annual financial reports are filed prior to deadlines. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and will implement policies and procedures to ensure that this problem does not recur. Please refer to the corrective action plan. As a result of COVID curtailments and a resulting national staffing shortage in the accounting profession, there were challenges to completing the 2022 and 2021 annual filing requirements prior to the deadline. Management has reviewed staffing and monthly and annual close project plans to verify that staffing and plans to issue and furnish annual financial statements timely are sufficient. The Project plans on being back in compliance for the year ending June 30, 2023, requirements.