FAC Explorer

Audit 297221

FY End
2023-09-30
Total Expended
$40.38M
Findings
2
Programs
3
Organization: Cloud County Health Center, Inc. (KS)
Year: 2023 Accepted: 2024-03-25
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
384093 2023-004 Significant Deficiency - N
960535 2023-004 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $39.42M Yes 1
93.498 Provider Relief Fund $703,641 Yes 0
93.301 Small Rural Hospital Improvement Grant Program $257,367 - 0

Contacts

Name Title Type
SLB6MM5UALU7 Ron Harrington Auditee
7852438430 Tyler Bernier Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Expenditures reported in 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 Medical Center has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Cloud County Health Center, Inc. d/b/a North Central Kansas Medical Center (Medical Center) under programs of the federal government for the year ended September 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 Medical Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Medical Center.
Title: Note 4 - Loan Programs Accounting Policies: Expenditures reported in 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 Medical Center has not elected to use the 10% de minimis cost rate. Total expenditures as reported on the schedule under the Rural Development Program Community Facilities Loans and Grants represents loan advances on interim financing from a commercial source and consist of the beginning of the year outstanding loan balance plus advances made on the loan during the year. As the U.S. Department of Agriculture (USDA) made a commitment on the interim financing loan, these expenditures are considered federal awards expended. During 2023, the interim financing was replaced with a direct loan with the USDA and a loan from a commercial source guaranteed by USDA. The total outstanding balance on the USDA program loans at September 30, 2023 was $39,313,446.
Title: Note 5 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Accounting Policies: Expenditures reported in 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 Medical Center has not elected to use the 10% de minimis cost rate. The Medical Center received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing # 93.498) during the year ended June 30, 2022, totaling $703,641. The Medical Center incurred eligible expenditures (including lost revenues) and, therefore, recognized revenues totaling $0 and $703,641 during the years ending September 30, 2023 and 2022, respectively, 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 the period ending September 30, 2023, totaling $703,461, as required under the PRF program.

Finding Details

Finding 2023-004
U.S. Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Applicable Federal Award Number – Direct Loan and Guaranteed Loan Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material 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 Medical Center was required to establish reserve accounts with deposits equal to 10% of the annual debt service requirement on the direct loan and guaranteed loan. The Medical Center did not establish these accounts, which were expected to total $48,386, based on three months of required deposits, during 2023. Cause: This deficiency is due to a misunderstanding of establishing reserve accounts as Salina Regional Health Center is the centralized cash management agent for the Medical Center. Effect: The Medical Center was not in compliance with the terms of the loan agreements related to the reserve funds. Questioned Costs: None. Context: Sampling was not used. Repeat Finding from Prior Years: No. Recommendation: We recommend that management create the appropriate reserve accounts, as required under the loan agreements. We recommend management implement a control process to ensure the monthly deposits are made as required, until the accounts are fully funded. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-004
U.S. Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Applicable Federal Award Number – Direct Loan and Guaranteed Loan Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material 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 Medical Center was required to establish reserve accounts with deposits equal to 10% of the annual debt service requirement on the direct loan and guaranteed loan. The Medical Center did not establish these accounts, which were expected to total $48,386, based on three months of required deposits, during 2023. Cause: This deficiency is due to a misunderstanding of establishing reserve accounts as Salina Regional Health Center is the centralized cash management agent for the Medical Center. Effect: The Medical Center was not in compliance with the terms of the loan agreements related to the reserve funds. Questioned Costs: None. Context: Sampling was not used. Repeat Finding from Prior Years: No. Recommendation: We recommend that management create the appropriate reserve accounts, as required under the loan agreements. We recommend management implement a control process to ensure the monthly deposits are made as required, until the accounts are fully funded. Views of Responsible Officials: Management agrees with the finding.