FAC Explorer

Audit 295111

FY End
2023-06-30
Total Expended
$2.06M
Findings
6
Programs
3
Organization: Floyd County Medical Center (IA)
Year: 2023 Accepted: 2024-03-14
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
377303 2023-004 Significant Deficiency - AB
377304 2023-005 Significant Deficiency Yes L
377305 2023-006 Significant Deficiency - P
953745 2023-004 Significant Deficiency - AB
953746 2023-005 Significant Deficiency Yes L
953747 2023-006 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.71M Yes 3
93.301 Small Rural Hospital Improvement Grant Program $254,631 - 0
93.697 Covid-19 Testing for Rural Health Clinics $100,000 - 0

Contacts

Name Title Type
NM7YLLHNVBL8 Craig Carstens Auditee
6412286830 Dave Studebaker 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 Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Floyd County Memorial Hospital d/b/a Floyd County Medical Center (Hospital) under programs of the federal government for the year ended June 30, 2023. 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 Hospital, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Hospital.
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 Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Hospital received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan Act (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) during the year ended June 30, 2022. The Hospital incurred eligible expenditures, including lost revenue, and therefore, recognized revenues totaling $1,642,001 for the year ended June 30, 2023 on the financial statements. In accordance with the 2023 compliance supplement, the PRF expenditures recognized on the Schedule are based on the reporting to HHS for Periods 4 and 5, defined as payments received during July 1, 2021 to June 30, 2022 of $1,642,001, plus interest earned of $66,934, as required under the PRF program. The amount of PRF expenditures included in 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.

Finding Details

Finding 2023-004
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 Hospital claimed expenses in the HHS special report for Period 4 that were related to services to be performed after the period of availability. Cause: The Hospital did not have an internal control process in place to ensure that all expenditures claimed met the terms and conditions of the federal award. Effect: Without an improved internal control process there is a possibility that ineligible expenditures may be claimed under the program. Questioned Costs: None over the $25,000 threshold. Context: A nonstatistical sample of 65 items ($592,145) from a total population exceeding 250 items ($1,708,935) were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure that the federal expenditures meet the terms and conditions of the grant. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 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: There was no evidence retained that the Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #420868216 was reviewed or approved by an individual separate from the preparer prior to submission. Cause: The Hospital did not have an internal control process in place to ensure documented review of the report submitted to the Department of Health and Human Services for Period 4. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards 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 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-006
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the Schedule of Expenditures of Federal Awards (Schedule) and accompanying notes to the Schedule. Condition: The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule and notes to the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft the Schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Hospital’s Schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-004
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 Hospital claimed expenses in the HHS special report for Period 4 that were related to services to be performed after the period of availability. Cause: The Hospital did not have an internal control process in place to ensure that all expenditures claimed met the terms and conditions of the federal award. Effect: Without an improved internal control process there is a possibility that ineligible expenditures may be claimed under the program. Questioned Costs: None over the $25,000 threshold. Context: A nonstatistical sample of 65 items ($592,145) from a total population exceeding 250 items ($1,708,935) were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure that the federal expenditures meet the terms and conditions of the grant. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 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: There was no evidence retained that the Hospital’s special report submitted to the Department of Health and Human Services for Period 4 TIN #420868216 was reviewed or approved by an individual separate from the preparer prior to submission. Cause: The Hospital did not have an internal control process in place to ensure documented review of the report submitted to the Department of Health and Human Services for Period 4. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal awards 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 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: Yes Recommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-006
Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420868216 Preparation of Schedule of Expenditures of Federal Awards Significant Deficiency in Internal Control Over Compliance – Other Criteria: Proper controls over financial reporting include the ability to prepare the Schedule of Expenditures of Federal Awards (Schedule) and accompanying notes to the Schedule. Condition: The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule and notes to the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft the Schedule that is correct without the assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Hospital’s Schedule and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.