FAC Explorer

Audit 290581

FY End
2021-12-31
Total Expended
$2.19M
Findings
6
Programs
2
Organization: Legacy Senior Services (MN)
Year: 2021 Accepted: 2024-02-15
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
369352 2021-002 Significant Deficiency - ABL
369353 2021-003 Material Weakness - L
369354 2021-004 Material Weakness - AB
945794 2021-002 Significant Deficiency - ABL
945795 2021-003 Material Weakness - L
945796 2021-004 Material Weakness - AB

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.54M Yes 3
21.019 Coronavirus Relief Fund $649,450 - 0

Contacts

Name Title Type
Q5KJVVH97JC6 Stephanie Schmidt Auditee
9417767457 Ashley Brandt-Duda 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. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. The accompanying consolidated schedule of expenditures of federal awards (the schedule) includes the federal award activity of Legacy Senior Services and Subsidiaries (the Organization) under programs of the federal government for the year ended December 31, 2021. The information 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 Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization.
Title: Principles of Consolidation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. The consolidated schedule of expenditures of federal awards includes the federal grant activity of Legacy Senior Services and Subsidiaries and its controlled entities (collectively, the Organization) which received federal financial assistance. Significant intercompany balances and transactions have been eliminated in the consolidated schedule of expenditures of federal awards. The following entities and their associated TIN numbers included within the schedule are as follows: LSS of Frazee, LLC – TIN#208729268, LSS of Madison, LLC – TIN#201209404, LSS of Marycrest, LLC – TIN#262181659, LSS of Traverse, LLC – TIN#273274611 and TIN#800015864.
Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Organization has not elected to use the 10% de minimis cost rate. The Organization received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution program (Federal Financial Assistance Listing #93.498) during the years ended December 31, 2021 and 2020. The Organization incurred eligible expenditures and, therefore, recognized $541,909 and $865,508 as revenue, included in total revenues, gains, and other support and $210,623 and $549,437 included in discontinued operations, for the years ended December 31, 2021 and 2020, respectively, on the consolidated financial statements. In accordance with the 2021 Compliance Supplement, the PRF expenditures recognized on the Schedule are based on the reporting to HHS for Period 1, defined as payments received during April 10, 2020, through June 30, 2020, and Period 2, defined as payments received during July 1, 2020, to December 31, 2020, of $1,538,908, as required under the PRF program. The following summarizes the provider relief funds and the timing of when the amounts were recognized in the consolidated financial statements. The total amount of PRF expenditures included on the Schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amounts that have been reimbursed or are obligated to be reimbursed by other sources and estimating marginal increases in expenses related to coronavirus. Actual amounts could differ from those estimates. See the Notes to the SEFA for chart/table

Finding Details

Finding 2021-002
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Activities Allowed or Unallowed and Allowable Costs/Cost Principles, and Reporting Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s final expenditure listing and lost revenue identified as eligible and claimed under the Provider Relief Fund program did not have documented review and approval by a separate individual outside of the preparer. In addition, the Organization’s special reports submitted to the Department of Health and Human Services (HHS) for Period 1 and Period 2 were not reviewed and approved by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval over the final expenditure listing, lost revenue calculation claimed under the federal program, or preparation of HHS Period 1 and 2 reporting were documented. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: Key line items were tested on the Period 1 and 2 Department of Health and Human Services special reports. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs and lost revenue calculation under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-003
Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization selected option ii to calculate lost revenue which consists of a comparison of actual results during the period of availability to the approved budget. The Organization did not have a budget for the entire reporting period that was approved prior to March 27, 2020. Cause: The Organization did have an approved budget prior to March 27, 2020, for calendar year 2020, but the approved budget did not cover the entire period of availability. Effect: The reporting to HHS for Period 1 and 2 was considered incorrect. The Organization did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Context: Key line items were tested on the Period 1 and 2 Department of Health and Human Services special reports. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-004
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: During our testing, there was no documentation for a portion of the sample selected. Cause: The Organization did not have an internal control process in place to ensure that allowable expenses were all properly supported. Effect: The lack of adequate policies governing expenditure support increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $140,360 of $1,292,789 direct program expenditures. Of these 65 items, seven were unsupported. Repeat Finding from Prior Years: No Recommendation: We recommend that the Organization enhance internal control policies to ensure all expenditures are supported to ensure that all payments are necessary, correct, meet the requirements of the federal program including an assessment of the period of availability, and are properly recorded in the reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-002
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Activities Allowed or Unallowed and Allowable Costs/Cost Principles, and Reporting Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization’s final expenditure listing and lost revenue identified as eligible and claimed under the Provider Relief Fund program did not have documented review and approval by a separate individual outside of the preparer. In addition, the Organization’s special reports submitted to the Department of Health and Human Services (HHS) for Period 1 and Period 2 were not reviewed and approved by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval over the final expenditure listing, lost revenue calculation claimed under the federal program, or preparation of HHS Period 1 and 2 reporting were documented. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: Key line items were tested on the Period 1 and 2 Department of Health and Human Services special reports. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs and lost revenue calculation under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-003
Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization selected option ii to calculate lost revenue which consists of a comparison of actual results during the period of availability to the approved budget. The Organization did not have a budget for the entire reporting period that was approved prior to March 27, 2020. Cause: The Organization did have an approved budget prior to March 27, 2020, for calendar year 2020, but the approved budget did not cover the entire period of availability. Effect: The reporting to HHS for Period 1 and 2 was considered incorrect. The Organization did not have a budget approved prior to March 27, 2020, for the entire period of availability. Questioned Costs: None reported. Context: Key line items were tested on the Period 1 and 2 Department of Health and Human Services special reports. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement procedures to ensure the lost revenue calculation claimed meet the requirements of the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-004
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 and Period 2 TIN #201209404, Period 1 and Period 2 TIN #208729268, Period 2 TIN #262181659, Period 1 and Period 2 TIN #273274611, Period 2 TIN #800015864 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: During our testing, there was no documentation for a portion of the sample selected. Cause: The Organization did not have an internal control process in place to ensure that allowable expenses were all properly supported. Effect: The lack of adequate policies governing expenditure support increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: A nonstatistical sample of 65 expenditures were selected for testing, which accounted for $140,360 of $1,292,789 direct program expenditures. Of these 65 items, seven were unsupported. Repeat Finding from Prior Years: No Recommendation: We recommend that the Organization enhance internal control policies to ensure all expenditures are supported to ensure that all payments are necessary, correct, meet the requirements of the federal program including an assessment of the period of availability, and are properly recorded in the reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.