FAC Explorer

Audit 305361

FY End
2023-06-30
Total Expended
$1.31M
Findings
4
Programs
3
Organization: Central Montana Medical Center (MT)
Year: 2023 Accepted: 2024-05-02
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
395729 2023-004 Material Weakness - L
395730 2023-005 Significant Deficiency - ABL
972171 2023-004 Material Weakness - L
972172 2023-005 Significant Deficiency - ABL

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.10M Yes 2
93.155 Rural Health Research Centers $112,338 - 0
93.697 Covid-19 Testing for Rural Health Clinics $100,000 - 0

Contacts

Name Title Type
MHM6KFQL3FR5 Perry Howell Auditee
4065356243 Scott Nelson Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Note 2 - Summary of Significant 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 Facilities does not draw from indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Central Montana Medical Facilities, Inc. (the Facilities) 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 Facilities, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Facilities.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Note 2 - Summary of Significant 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 Facilities does not draw from indirect administrative expenses and has not elected to use the 10% de minimis indirect 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: Note 2 - Summary of Significant 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 Facilities does not draw from indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate. The Facilities does not draw from indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate.
Title: Note 4 - Provider Relief Funds and American Rescue Plan (ARP) Rural Distribution Accounting Policies: Note 2 - Summary of Significant 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 Facilities does not draw from indirect administrative expenses and has not elected to use the 10% de minimis indirect cost rate. The Facilities 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). In accordance with the 2023 compliance supplement, the PRF expenditures recognized on the schedule are based on the reporting to HHS for Period 4, defined as payments received during July 1, 2021 to December 31, 2021 of $1,099,098 and Period 5, defined as payments received during January 1, 2022 to June 30, 2022 as required under the PRF program. The Facilities did not receive funding during Period 5. The following summarized the Provider Relief Funds and the timing of when the amounts were recognized in the financial statements. See the Notes to the SEFA for chart/table.

Finding Details

Finding 2023-004
Department of Health and Human Services Federal 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 #237169043 Reporting Material Weakness in Internal Control Over Compliance and Material 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 Facilities did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 4 to ensure accurate quarterly reporting of net patient revenue. Effect: Key line items for reporting related to lost revenue were materially misstated. No lost revenue was claimed during the current period. Questioned Costs: None reported. Context/Sampling: Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No. Recommendation: Management should enhance its internal controls over federal award compliance and review to ensure proper reporting of net patient care revenue. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal 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 #237169043 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that an entity must establish and maintain effective internal control over a 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 Facilities claimed equipment costs under the Provider Relief Fund program for a project that was not complete at the end of the period of availability, or December 31, 2022. Cause – The Facilities’ internal control process in place to ensure review and approval of expenses claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 4, did not detect the error. Effect – Costs were improperly included within the Period 4 report and caused the reporting submitted to the Department of Health and Human Services to be inaccurate. Questioned Costs – $15,019. Context/Sampling – Detail testing was completed over $1,099,098 of the expenses for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 4 items were selected for detail testing, which accounted for $991,840 of $1,099,098 of direct program expenditures. One $15,019 invoice, net of reimbursed costs within the sample was deemed a questioned cost, as the equipment was not placed into service as of December 31, 2022. There is a known error of $15,019 for all costs claimed on the Period 4 report related to the equipment. Repeat Finding from Prior Year – No. Recommendation – We recommend that management implement procedures to ensure the costs claimed meet the requirements of the federal program. In addition, we recommend that the Facilities enhance internal control policies to ensure all costs are reviewed to ensure that they are within the period of availability defined by the terms and conditions. Views of Responsible Officials – Management agrees with the finding.
Finding 2023-004
Department of Health and Human Services Federal 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 #237169043 Reporting Material Weakness in Internal Control Over Compliance and Material 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 Facilities did not consider the impact of the year-end audit adjustments on the quarters applicable to Period 4 when reporting lost revenue. Cause: The established internal controls did not consider the effect of the year-end audit adjustments by quarter for Period 4 to ensure accurate quarterly reporting of net patient revenue. Effect: Key line items for reporting related to lost revenue were materially misstated. No lost revenue was claimed during the current period. Questioned Costs: None reported. Context/Sampling: Key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Years: No. Recommendation: Management should enhance its internal controls over federal award compliance and review to ensure proper reporting of net patient care revenue. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Department of Health and Human Services Federal 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 #237169043 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control over Compliance Criteria –2 CFR 200.303(a) establishes that an entity must establish and maintain effective internal control over a 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 Facilities claimed equipment costs under the Provider Relief Fund program for a project that was not complete at the end of the period of availability, or December 31, 2022. Cause – The Facilities’ internal control process in place to ensure review and approval of expenses claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 4, did not detect the error. Effect – Costs were improperly included within the Period 4 report and caused the reporting submitted to the Department of Health and Human Services to be inaccurate. Questioned Costs – $15,019. Context/Sampling – Detail testing was completed over $1,099,098 of the expenses for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 4 items were selected for detail testing, which accounted for $991,840 of $1,099,098 of direct program expenditures. One $15,019 invoice, net of reimbursed costs within the sample was deemed a questioned cost, as the equipment was not placed into service as of December 31, 2022. There is a known error of $15,019 for all costs claimed on the Period 4 report related to the equipment. Repeat Finding from Prior Year – No. Recommendation – We recommend that management implement procedures to ensure the costs claimed meet the requirements of the federal program. In addition, we recommend that the Facilities enhance internal control policies to ensure all costs are reviewed to ensure that they are within the period of availability defined by the terms and conditions. Views of Responsible Officials – Management agrees with the finding.