FAC Explorer

Audit 306892

FY End
2022-12-31
Total Expended
$21.64M
Findings
6
Programs
3
Organization: St. Vincent General Hospital District (CO)
Year: 2022 Accepted: 2024-05-22
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
398188 2022-004 Material Weakness - L
398189 2022-005 Material Weakness Yes L
398190 2022-006 Material Weakness - N
974630 2022-004 Material Weakness - L
974631 2022-005 Material Weakness Yes L
974632 2022-006 Material Weakness - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $21.35M Yes 3
93.498 Provider Relief Fund $224,585 - 0
93.155 Rural Health Research Centers $67,342 - 0

Contacts

Name Title Type
LZLWLKX7NRY3 Kelly Johnston Auditee
9706233752 Brad Delong 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: St. Vincent General Hospital District 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 St. Vincent General Hospital District 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 St. Vincent General Hospital District, it is not intended to and does
Title: Note 2 – 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: St. Vincent General Hospital District has not elected to use the 10% de minimis 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: St. Vincent General Hospital District has not elected to use the 10% de minimis cost rate. St. Vincent General Hospital District has not elected to use the 10% de minimis cost rate.
Title: Note 4 – Provider Relief Funds 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: St. Vincent General Hospital District 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 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 $224,585 was included in the Period 4 report submitted to HHS, that amount is shown on the accompanying Schedule.
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: St. Vincent General Hospital District has not elected to use the 10% de minimis cost rate. Expenditures reported on this Schedule consists of the beginning of the year outstanding loan balances of the Hospital’s USDA direct loans of $17,290,000, as well as $4,510,000, which is 90% of the beginning of the year outstanding balance of the Hospital’s USDA guaranteed loan. If applicable, advances made on the loans during the year are reported on the Schedule. The Hospital’s made no advances on the loans during the year ended December 31, 2022. The Hospital’s outstanding loan balances for the direct loans and the guaranteed loan as of December 31, 2022 are $16,952,841 and $4,430,697, respectively.

Finding Details

Finding 2022-004
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan Rural Distribution Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance 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. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required with the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft a Schedule that is correct without 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 internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-005
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Under the terms and conditions of the award, the recipient certifies it will provide quarterly financial information, the annual budget, annual financial statements, annual Medicare cost report, and annual debt service reserve calculation to the United States Department of Agriculture and the interim financing lender. Condition: The Hospital did not submit the quarterly reports for 2022 to the United States Department of Agriculture and the interim financing lender and did not send the annual budget, financial statements, cost report, and debt service reserve calculation to the United States Department of Agriculture. Cause: The Hospital did not have policies or procedures in place surrounding the required reporting. The Hospital also had turnover in management, and the interim management personnel was not aware of all reporting requirements. Effect: The Hospital was out of compliance with the terms and conditions of the award during 2022. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: We recommend management implement policies and procedures surrounding the reporting required under the United States Department of Agriculture loan program as well as provide the required reports on a timely basis to all respective parties. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-006
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Special Tests and Provisions 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: During our testing, there was no formal review documented over the reserve fund reconciliations, no monitoring and review of the debt covenants, and the debt service reserve fund accounts were underfunded by approximately $701,000 for the federal program. In addition, there were two separate withdrawals totaling $94,000 from the debt service reserve fund that were not properly approved by the USDA. Cause: The Hospital did not have adequate internal control policies in place to ensure review and approval over the reserve funds, monitoring of all required debt covenants, proper funding of the reserve accounts, or to ensure that proper procedures are followed for obtaining USDA approval for any withdrawals from the debt service reserve funds. Effect: The lack of adequate policies governing the review and monitoring of the required debt covenants increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. In addition, the lack of adequate policies governing proper funding of reserves and ensuring proper procedures are followed to obtain USDA approval for any withdrawals, increases 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 reported. Context: Sampling was not used. The Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure formal documentation of reviews for the reserve fund reconciliations is retained, monitoring that the required debt covenants are monitored and reviewed, reserve funds are properly funded, and that there are proper procedures in place for obtaining USDA approval for any future withdrawals from the debt service reserve funds. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-004
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan Rural Distribution Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance 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. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required with the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft a Schedule that is correct without 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 internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-005
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Under the terms and conditions of the award, the recipient certifies it will provide quarterly financial information, the annual budget, annual financial statements, annual Medicare cost report, and annual debt service reserve calculation to the United States Department of Agriculture and the interim financing lender. Condition: The Hospital did not submit the quarterly reports for 2022 to the United States Department of Agriculture and the interim financing lender and did not send the annual budget, financial statements, cost report, and debt service reserve calculation to the United States Department of Agriculture. Cause: The Hospital did not have policies or procedures in place surrounding the required reporting. The Hospital also had turnover in management, and the interim management personnel was not aware of all reporting requirements. Effect: The Hospital was out of compliance with the terms and conditions of the award during 2022. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes Recommendation: We recommend management implement policies and procedures surrounding the reporting required under the United States Department of Agriculture loan program as well as provide the required reports on a timely basis to all respective parties. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-006
U.S. Department of Agricultures Federal Assistance Listing #10.766 Community Facilities Loan and Grant Cluster Special Tests and Provisions 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: During our testing, there was no formal review documented over the reserve fund reconciliations, no monitoring and review of the debt covenants, and the debt service reserve fund accounts were underfunded by approximately $701,000 for the federal program. In addition, there were two separate withdrawals totaling $94,000 from the debt service reserve fund that were not properly approved by the USDA. Cause: The Hospital did not have adequate internal control policies in place to ensure review and approval over the reserve funds, monitoring of all required debt covenants, proper funding of the reserve accounts, or to ensure that proper procedures are followed for obtaining USDA approval for any withdrawals from the debt service reserve funds. Effect: The lack of adequate policies governing the review and monitoring of the required debt covenants increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. In addition, the lack of adequate policies governing proper funding of reserves and ensuring proper procedures are followed to obtain USDA approval for any withdrawals, increases 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 reported. Context: Sampling was not used. The Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital enhance internal control policies to ensure formal documentation of reviews for the reserve fund reconciliations is retained, monitoring that the required debt covenants are monitored and reviewed, reserve funds are properly funded, and that there are proper procedures in place for obtaining USDA approval for any future withdrawals from the debt service reserve funds. Views of Responsible Officials: Management agrees with the finding.