FAC Explorer

Audit 30908

FY End
2022-12-31
Total Expended
$20.47M
Findings
4
Programs
3
Organization: Edgerton Hospital and Health Services (WI)
Year: 2022 Accepted: 2023-05-07
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
32039 2022-004 Significant Deficiency - L
32040 2022-005 - - ABL
608481 2022-004 Significant Deficiency - L
608482 2022-005 - - ABL

Programs

ALN Program Spent Major Findings
14.128 Mortgage Insurance_hospitals $20.25M Yes 1
93.155 Rural Health Research Centers $126,913 - 0
93.498 Provider Relief Fund $95,395 - 1

Contacts

Name Title Type
KVJ5VT587LA3 Charles Roeder Auditee
6088841656 Brian Unsen Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances 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 has not elected to use the 10% de minimis cost rate. No draws for indirect costs were made. The Organizations mortgage note payable is guaranteed under the U. S. Department of Housing and Urban Developments Section 242 Program. The program guarantees 99% of the outstanding mortgage balance. The balance included on the Schedule represents 99% of the loan balance of $20,449,966 as of January 1, 2022, which is $20,245,466. The outstanding balance at December 31, 2022 is $19,428,503.
Title: 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 has not elected to use the 10% de minimis cost rate. No draws for indirect costs were made. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Edgerton Hospital and Health Services, Inc. (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: Provider Relief Fund and American Rescue Plan 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 has not elected to use the 10% de minimis cost rate. No draws for indirect costs were made. The Organization received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID19 Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution program (Federal Financial Assistance Listing/CFDA #93.498) during the years ended December 31, 2021 and 2020. The Organization incurred eligible expenditures and, therefore, recognized revenues totaling $0 and $4,136,011 for the years ended December 31, 2022 and 2021, respectively, on the financial statements. In accordance with the 2022 compliance supplement, the PRF expenditures recognized on the Schedule are based on the reporting to HHS for Periods 3 and 4 and, defined as payments received during January 1, 2021 to December 31, 2021 of $95,395 as required under the PRF program.The amount of PRF expenditures included in 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.

Finding Details

Finding 2022-004
Department of Housing and Urban Development Federal Assistance Listing/CFDA #14.128 Section 242 ? Mortgage Insurance - Hospitals 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 federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization?s third quarter report submitted to the Department of Housing and Urban Development (HUD) under reported Other Operating Revenue. Cause: The Organization did not have a control process in place to ensure the report submitted to HUD agreed to their internal financial statement. Effect: The Organization understated Other Operating Revenue in a quarterly report making the report inaccurate. Questioned Costs: None reported. Context: There were a total of eight reports required to be submitted for the year ended December 31, 2022. Three were selected for testing. Of the three selected, one had errors. Through review of a subsequent quarterly report, it was noted that the incorrect line item had been corrected during the year. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency be completed after they have been entered into HUD?s format. Views of Responsible Officials: Management agrees with the finding. We will follow our policy of ?Review of Reports Filed with Federal Agencies? as a control over reporting and compliance.
Finding 2022-005
Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 4 TIN #390819992 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization?s special report required to be submitted to the Department of Health and Human Services for Period 4 TIN #390819992 was not filed by the required due date of March 31, 2023. Cause: The Organization did not have an internal control process in place to ensure the report was submitted to the Department of Health and Human Services for Period 4 timely. Effect: The Organization is not in compliance with the programs reporting requirements. Questioned Costs: $95,395. Context: The Period 4 Department of Health and Human Services special report was not filed. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency be documented. Views of Responsible Officials: Management agrees with the finding. We will follow our policy of ?Review of Reports Filed with Federal Agencies? as a control over reporting and compliance. While we attempted to file our report prior to the deadline multiple times, we first identified internal communication problems and then IT connectivity problems each time we attempted our submission and were unable to resolve by the deadline. Following the deadline, we were successful in submitting our Request to Report Late (RRL) Form on April 25th prior to its deadline of April 28, 2023.
Finding 2022-004
Department of Housing and Urban Development Federal Assistance Listing/CFDA #14.128 Section 242 ? Mortgage Insurance - Hospitals 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 federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization?s third quarter report submitted to the Department of Housing and Urban Development (HUD) under reported Other Operating Revenue. Cause: The Organization did not have a control process in place to ensure the report submitted to HUD agreed to their internal financial statement. Effect: The Organization understated Other Operating Revenue in a quarterly report making the report inaccurate. Questioned Costs: None reported. Context: There were a total of eight reports required to be submitted for the year ended December 31, 2022. Three were selected for testing. Of the three selected, one had errors. Through review of a subsequent quarterly report, it was noted that the incorrect line item had been corrected during the year. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency be completed after they have been entered into HUD?s format. Views of Responsible Officials: Management agrees with the finding. We will follow our policy of ?Review of Reports Filed with Federal Agencies? as a control over reporting and compliance.
Finding 2022-005
Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 4 TIN #390819992 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization?s special report required to be submitted to the Department of Health and Human Services for Period 4 TIN #390819992 was not filed by the required due date of March 31, 2023. Cause: The Organization did not have an internal control process in place to ensure the report was submitted to the Department of Health and Human Services for Period 4 timely. Effect: The Organization is not in compliance with the programs reporting requirements. Questioned Costs: $95,395. Context: The Period 4 Department of Health and Human Services special report was not filed. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency be documented. Views of Responsible Officials: Management agrees with the finding. We will follow our policy of ?Review of Reports Filed with Federal Agencies? as a control over reporting and compliance. While we attempted to file our report prior to the deadline multiple times, we first identified internal communication problems and then IT connectivity problems each time we attempted our submission and were unable to resolve by the deadline. Following the deadline, we were successful in submitting our Request to Report Late (RRL) Form on April 25th prior to its deadline of April 28, 2023.