FAC Explorer

Audit 293029

FY End
2023-06-30
Total Expended
$8.96M
Findings
2
Programs
7
Organization: Marshall Browning Hospital Association (IL)
Year: 2023 Accepted: 2024-03-01
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
371400 2023-001 Significant Deficiency Yes P
947842 2023-001 Significant Deficiency Yes P

Programs

ALN Program Spent Major Findings
14.128 Mortgage Insurance_hospitals $8.36M Yes 1
93.155 Rural Health Research Centers $256,978 - 0
93.697 Covid-19 Testing for Rural Health Clinics $200,000 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $52,461 - 0
10.874 Delta Health Care Services Grant Program $43,614 - 0
93.301 Small Rural Hospital Improvement Grant Program $10,833 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $7,500 - 0

Contacts

Name Title Type
TPJCACFSMJE7 Harold Calderon Auditee
6185424756 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 Funds (“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 reporting period 4. The Hospital did not receive any funds for reporting period 4 and as a result there are not PRF funds reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The Hospital has not elected 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 Marshall Browning Hospital Association (the “Hospital”). 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 Hospital, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Hospital.
Title: Note 4: Subrecipients Accounting Policies: With the exception of expenditures related to the Provider Relief Funds (“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 reporting period 4. The Hospital did not receive any funds for reporting period 4 and as a result there are not PRF funds reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The Hospital has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Hospital 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 Funds (“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 reporting period 4. The Hospital did not receive any funds for reporting period 4 and as a result there are not PRF funds reported in the accompanying Schedule. De Minimis Rate Used: N Rate Explanation: The Hospital has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Section 242 Mortgage Insured Loan amount in the Schedule represents the balance of the loan outstanding as of June 30, 2022. The loan is subject to restrictive covenants, including restrictions on additional long-term borrowings and prepayment of the outstanding obligation. Under the terms of the HUD-insured mortgage loan, the Hospital is required to maintain certain deposits with a trustee. Such deposits are included in assets whose use is limited. The Hospital repaid the loan in full which is reported in the Schedule during the year ended June 30, 2023 as described in the long-term debt refinancing transaction in Note 7 to the accompanying financial statements.

Finding Details

Finding 2023-001
2023-001: Segregation of Duties and Information Systems Access Condition: The size of the Hospital’s office staff precludes a proper segregation of functions to ensure adequate internal control. 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. This is not unusual in entities this size, but the Board of Directors should continue to be aware of this condition and to realize the concentration of duties and responsibilities in a limited number of individuals is not desirable for an effective system of internal control. Under those conditions, the most effective controls lie in the Board of Directors' knowledge of matters relating to Hospital operations; however, a significant deficiency exists in the Hospital’s internal controls. This is a repeat finding from 2022-001. Criteria: The lack of proper segregation of duties is considered an internal control weakness. Effect: As a result of not having a sufficient number of individuals in the accounting and business office department to segregate duties, the Hospital has an internal control weakness. Recommendation: We recommend that 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. Corrective Action Plan: The Hospital does not have the resources available to increase staff size and address this internal control deficiency; however, in the past year several positions have turned over and this has created an opportunity to review assignments of work and job duties while trying to maintain relatively the same size staff in the future. The Board of Directors and management are aware of the incompatible duties and will continue to provide oversight and monitor the Hospital's operations, as well as review recommendations from the Chief Financial Officer of the Hospital on proposed changes in job assignments for potential future segregation of duties concerns.
Finding 2023-001
2023-001: Segregation of Duties and Information Systems Access Condition: The size of the Hospital’s office staff precludes a proper segregation of functions to ensure adequate internal control. 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. This is not unusual in entities this size, but the Board of Directors should continue to be aware of this condition and to realize the concentration of duties and responsibilities in a limited number of individuals is not desirable for an effective system of internal control. Under those conditions, the most effective controls lie in the Board of Directors' knowledge of matters relating to Hospital operations; however, a significant deficiency exists in the Hospital’s internal controls. This is a repeat finding from 2022-001. Criteria: The lack of proper segregation of duties is considered an internal control weakness. Effect: As a result of not having a sufficient number of individuals in the accounting and business office department to segregate duties, the Hospital has an internal control weakness. Recommendation: We recommend that 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. Corrective Action Plan: The Hospital does not have the resources available to increase staff size and address this internal control deficiency; however, in the past year several positions have turned over and this has created an opportunity to review assignments of work and job duties while trying to maintain relatively the same size staff in the future. The Board of Directors and management are aware of the incompatible duties and will continue to provide oversight and monitor the Hospital's operations, as well as review recommendations from the Chief Financial Officer of the Hospital on proposed changes in job assignments for potential future segregation of duties concerns.