FAC Explorer

Audit 296454

FY End
2022-12-31
Total Expended
$20.28M
Findings
4
Programs
4
Organization: Rio Grande Hospital (CO)
Year: 2022 Accepted: 2024-03-21
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
382876 2022-004 Material Weakness Yes B
382877 2022-005 Significant Deficiency - L
959318 2022-004 Material Weakness Yes B
959319 2022-005 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $18.93M Yes 1
93.498 Provider Relief Fund $1.02M Yes 1
93.697 Covid-19 Testing for Rural Health Clinics $200,000 - 0
93.301 Small Rural Hospital Improvement Grant Program $132,985 - 0

Contacts

Name Title Type
TTLNMLCLPUJ7 Arlene Harms Auditee
7198498899 Ashley Brandt-Duda Auditor
No contacts on file

Notes to SEFA

Title: Note 1 ‐ 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 does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. The accompanying consolidated schedule of expenditures of federal awards (the schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended December 31, 2022. 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: Note 2 ‐ Summary of Significant Accounting Policies 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 does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. 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.
Title: Note 3 ‐ Indirect Cost Rate 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 does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. The Organization does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate.
Title: Note 4 ‐ COVID‐19 Provider Relief Funds 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 does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. The Organization received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498). The PRF expenditures are recognized on the schedule when the expenditures were included in the reporting to HHS for Period 4, defined as payments received between July 1, 2021 and December 31, 2021. As the total amount of $1,015,166 was included in the Period 4 report submitted to HHS, that amount is shown on the accompanying schedule. 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.
Title: Note 5 ‐ Loan Programs 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 does not draw for indirect administrative expenses and has not elected to use the 10% de minimus cost rate. Expenditures reported on this schedule consists of the beginning of the year outstanding loan balance of the Organization’s USDA direct loans of $12,896,711, as well as $6,030,526, which is 90% of the beginning of the year outstanding balance of the Organization’s USDA guaranteed loan. If applicable, advances made on the loans during the year are reported on the schedule. The Organization made no advances on the loans during the year ended December 31, 2022. The Organization’s outstanding loan balances for the direct loans and the guaranteed loan as of December 31, 2022 are $12,679,856 and $6,576,363 (of which 90% is $5,918,727), respectively.

Finding Details

Finding 2022-004
2022‐004 Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan Rural (ARP) Distribution Applicable Federal Award Number and Year ‐ Period 4 TIN #841276376 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Material Weakness in Internal Control Over Compliance and 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 had various invoices and employee timecards identified as COVID‐19 eligible that did not follow the Organization’s review and approval process for COVID‐19 funding. Cause ‐ The Organization did not have an adequate internal control policy in place to ensure documented review and approval over specific invoices and employee timecards as it relates to COVID‐19. Effect ‐ The lack of adequate policies governing review and approval of the specific invoices and employee timecards increase the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Without this documentation, ineligible expenditures may be claimed under the program. Questioned Costs ‐ None. $6,686 of improper expenses were noted due to use of incorrect pay rates or invoice amounts. However, the Organization has excess lost revenue of $157,250 and excess expenses of $345,951 that can be substituted for these expenses. Context ‐ Detail testing was completed over expenses. A nonstatistical sample of 60 expenditures were selected for detail testing and 11 of the expenditures did not follow the internal control process for the COVID‐19 funding. In addition, incorrect pay rates were utilized on the wages tracking sheet for four selections along with one incorrect invoice amount on the tracking sheet. Repeat Finding from Prior Years ‐ Yes, Finding 2021‐004. Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure all invoices and employee timecards follow the internal control policies implemented by the Organization as it relates to the COVID‐19 funding. We recommend that the Organization also ensure proper reviews are completed to ensure invoices and pay rates are recorded correctly on the expense tracking sheet. This will ensure that all expenses claimed under the federal program are necessary, reasonable, and meet the requirements of the federal program. Views of Responsible Officials ‐ Management agrees with the finding.
Finding 2022-005
2022‐005 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster 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 ‐ During our testing, we noted a lack of documentation of a secondary review on the RD442‐2 forms submitted to the USDA. Cause ‐ The Organization did not have an adequate internal control policy in place to ensure the review and approval of the report was documented. Effect ‐ The lack of adequate policies governing review and approval increase 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. Context ‐ A selection of four quarterly reports out of total population of eight were tested. Documentation of a secondary review was missing from two quarterly reports. Repeat Finding from Prior Years ‐ No Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure that formal documentation of the reviews are present. Views of Responsible Officials ‐ Management agrees with the finding.
Finding 2022-004
2022‐004 Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan Rural (ARP) Distribution Applicable Federal Award Number and Year ‐ Period 4 TIN #841276376 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Material Weakness in Internal Control Over Compliance and 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 had various invoices and employee timecards identified as COVID‐19 eligible that did not follow the Organization’s review and approval process for COVID‐19 funding. Cause ‐ The Organization did not have an adequate internal control policy in place to ensure documented review and approval over specific invoices and employee timecards as it relates to COVID‐19. Effect ‐ The lack of adequate policies governing review and approval of the specific invoices and employee timecards increase the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Without this documentation, ineligible expenditures may be claimed under the program. Questioned Costs ‐ None. $6,686 of improper expenses were noted due to use of incorrect pay rates or invoice amounts. However, the Organization has excess lost revenue of $157,250 and excess expenses of $345,951 that can be substituted for these expenses. Context ‐ Detail testing was completed over expenses. A nonstatistical sample of 60 expenditures were selected for detail testing and 11 of the expenditures did not follow the internal control process for the COVID‐19 funding. In addition, incorrect pay rates were utilized on the wages tracking sheet for four selections along with one incorrect invoice amount on the tracking sheet. Repeat Finding from Prior Years ‐ Yes, Finding 2021‐004. Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure all invoices and employee timecards follow the internal control policies implemented by the Organization as it relates to the COVID‐19 funding. We recommend that the Organization also ensure proper reviews are completed to ensure invoices and pay rates are recorded correctly on the expense tracking sheet. This will ensure that all expenses claimed under the federal program are necessary, reasonable, and meet the requirements of the federal program. Views of Responsible Officials ‐ Management agrees with the finding.
Finding 2022-005
2022‐005 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster 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 ‐ During our testing, we noted a lack of documentation of a secondary review on the RD442‐2 forms submitted to the USDA. Cause ‐ The Organization did not have an adequate internal control policy in place to ensure the review and approval of the report was documented. Effect ‐ The lack of adequate policies governing review and approval increase 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. Context ‐ A selection of four quarterly reports out of total population of eight were tested. Documentation of a secondary review was missing from two quarterly reports. Repeat Finding from Prior Years ‐ No Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure that formal documentation of the reviews are present. Views of Responsible Officials ‐ Management agrees with the finding.