FAC Explorer

Audit 302723

FY End
2022-09-30
Total Expended
$861,050
Findings
2
Programs
2
Organization: St. John's Lutheran Home of Albert Lea (MN)
Year: 2022 Accepted: 2024-04-05
Auditor: Lethert Skwira Schultz & CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392369 2022-001 Material Weakness Yes P
968811 2022-001 Material Weakness Yes P

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $496,350 Yes 1
10.766 Community Facilities Loans and Grants $364,700 Yes 0

Contacts

Name Title Type
T55JM4L4K7T5 Jeff Bredt Auditee
6127189002 Angie Agrey Auditor
No contacts on file

Notes to SEFA

Title: 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 assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: De minimis cost rate not used due to nature of reward The accompanying 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 September 30, 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: Significant Accounting Policies 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 assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: De minimis cost rate not used due to nature of reward 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 assistance has been provided to a subrecipient.
Title: Indirect Cost Rate 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 assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: De minimis cost rate not used due to nature of reward The Organization has not elected to use the 10-percent de minimus indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2022-001
Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.
Finding 2022-001
Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.