FAC Explorer

Audit 310662

FY End
2023-09-30
Total Expended
$25.74M
Findings
2
Programs
5
Organization: Hospital Development Company D/b/a Roane General Hospital (WV)
Year: 2023 Accepted: 2024-06-28
Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
403617 2023-001 Significant Deficiency - N
980059 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $23.45M Yes 1
93.498 Provider Relief Fund $2.26M Yes 0
93.155 Rural Health Research Centers $25,836 - 0
93.889 National Bioterrorism Hospital Preparedness Program $1,500 - 0
93.301 Small Rural Hospital Improvement Grant Program $1,000 - 0

Contacts

Name Title Type
FNEBNUE2D7V8 Amy Downey Auditee
3049276201 James Raley Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, with the exception of expenditures associated with the U.S. Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution. 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. For the awards related to the Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution program, the HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) PRF Reporting Portal. Payments from the HHS for PRF are assigned to 'Payment Received Periods' (each, a Period) based upon the date each payment from the PRF was received. Each Period as a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end of the Period of Availability). De Minimis Rate Used: N Rate Explanation: The Hospital 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 Hospital Development Company (d/b/a Roane General Hospital) (the Hospital) under programs of the federal government for the year ended September 30, 2023. The information in this Schedule 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 Hospital, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Hospital.
Title: Loan and Loan Guarantee Programs Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting, with the exception of expenditures associated with the U.S. Department of Health and Human Services (HHS) Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution. 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. For the awards related to the Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution program, the HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) PRF Reporting Portal. Payments from the HHS for PRF are assigned to 'Payment Received Periods' (each, a Period) based upon the date each payment from the PRF was received. Each Period as a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Period's deadline to use the funds (i.e., after the end of the Period of Availability). De Minimis Rate Used: N Rate Explanation: The Hospital has not elected to use the 10% de minimis indirect cost rate. The Schedule includes loans and loan guarantees totaling $23,447,324 received or guaranteed by the U.S. Department of Agriculture (USDA) during the year. There were no interest subsidies, cash or administrative cost allowances received during the year ended September 30, 2023. The balance of the loans and loan guarantees as of September 30, 2023, amounted to $22,871,124.

Finding Details

Finding 2023-001
Federal Program: Community Facilities Loans and Grants Cluster: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Pass-through Agency: N/A Award Number: N/A Award Year: 2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria: Section 4.6 of the USDA's Loan Guarantee Agreement stipulates that the borrower must maintain certain financial reporting covenants, such as debt service coverage ratio of at least 1.25, days cash on hand in excess of 65 days, and obtaining an audited fiscal year-end financial statement audited by independent certified public accountants withing one hundred ten days subsequent to year end. Additionally, section 4(d) of the Community Facilities Loan Resolution Agreement stipulates that the Hospital will establish and maintain a bookkeeping or separate bank account for the debt reserve funds. As of September 30, 2023 the Hospital had not maintained a separate account at the bank with sufficient funds, nor was a separate general ledger account established. Condition and Context: The Hospital did not maintain a days cash on hand in excess of 65 days, as of September 30, 2023. Additionally, the Hospital failed to maintain a separate account at the bank with sufficient funds, nor was a separate general ledger account established. The Hospital's audited financial statements as of September 30, 2023 were issued subsequent to one hundred ten days following September 30, 2023. Effect: The Hospital has failed to comply with the debt covenants and subsequently received waivers from the financial institution and Federal Grantor. Cause: The Hospital did not have sufficient internal controls in place to monitor on-going compliance with the loan agreement. Recommendation: We recommend that management implement procedures to ensure that all grant and loan agreements are reviewed on an on-going basis and that compliance requirements are recorded and tracked to ensure on-going compliance. Management's Corrective Action Plan: Management agrees with this finding and has implemented controls to monitor on-going compliance with both financial and non-financial covenants. Additionally, when management became aware of the non-compliance, it notified the financial institution and Federal Grantor and received waivers.
Finding 2023-001
Federal Program: Community Facilities Loans and Grants Cluster: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Pass-through Agency: N/A Award Number: N/A Award Year: 2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria: Section 4.6 of the USDA's Loan Guarantee Agreement stipulates that the borrower must maintain certain financial reporting covenants, such as debt service coverage ratio of at least 1.25, days cash on hand in excess of 65 days, and obtaining an audited fiscal year-end financial statement audited by independent certified public accountants withing one hundred ten days subsequent to year end. Additionally, section 4(d) of the Community Facilities Loan Resolution Agreement stipulates that the Hospital will establish and maintain a bookkeeping or separate bank account for the debt reserve funds. As of September 30, 2023 the Hospital had not maintained a separate account at the bank with sufficient funds, nor was a separate general ledger account established. Condition and Context: The Hospital did not maintain a days cash on hand in excess of 65 days, as of September 30, 2023. Additionally, the Hospital failed to maintain a separate account at the bank with sufficient funds, nor was a separate general ledger account established. The Hospital's audited financial statements as of September 30, 2023 were issued subsequent to one hundred ten days following September 30, 2023. Effect: The Hospital has failed to comply with the debt covenants and subsequently received waivers from the financial institution and Federal Grantor. Cause: The Hospital did not have sufficient internal controls in place to monitor on-going compliance with the loan agreement. Recommendation: We recommend that management implement procedures to ensure that all grant and loan agreements are reviewed on an on-going basis and that compliance requirements are recorded and tracked to ensure on-going compliance. Management's Corrective Action Plan: Management agrees with this finding and has implemented controls to monitor on-going compliance with both financial and non-financial covenants. Additionally, when management became aware of the non-compliance, it notified the financial institution and Federal Grantor and received waivers.