Audit 31227

FY End
2022-06-30
Total Expended
$21.52M
Findings
2
Programs
4
Year: 2022 Accepted: 2023-02-06

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
34584 2022-001 Significant Deficiency - N
611026 2022-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $20.86M Yes 1
93.697 Covid-19 Testing for Rural Health Clinics $398,923 - 0
93.155 Covid -19 - Rural Health Research Centers $232,660 - 0
93.498 Covid - 19 - Provider Relief Fund $24,755 - 0

Contacts

Name Title Type
NL6BAYJGX3M5 Tim McGahen Auditee
8146644641 James Raley Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Note 2.Summary of Significant 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 and a portion of the U.S. Department of Agriculture (USDA) Community Facilities Loans and Grants. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited as to reimbursement. For the awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF), 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 has a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability). For the awards related to the U.S. Department of Agriculture Community Facilities Loans and Grants the USDA has indicated that the amount of outstanding loans issued under the Community Facilities Loans and Grants must be included in the borrowers Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY FACILITIES LOANS AND GRANTS (10.766) - Balances outstanding at the end of the audit period were 20088587.
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, 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 and a portion of the U.S. Department of Agriculture (USDA) Community Facilities Loans and Grants. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited as to reimbursement. For the awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF), 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 has a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability). For the awards related to the U.S. Department of Agriculture Community Facilities Loans and Grants the USDA has indicated that the amount of outstanding loans issued under the Community Facilities Loans and Grants must be included in the borrowers Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Corry Memorial Hospital Association d/b/a LECOM Health Corry Memorial Hospital and Subsidiaries (Association) under programs of the federal government for the year ended June 30 2022. 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 Corry Memorial Hospital Association d/b/a LECOM Health Corry Memorial Hospital and Subsidiaries, it is not intended to and does not present the consolidated financial position, changes in net assets, or cash flows of Corry Memorial Hospital Association d/b/a LECOM Health Corry Memorial Hospital and Subsidiaries.
Title: Note 3.Summary of U.S. Department of Agriculture Community Facilities Loan Accounting Policies: Note 2.Summary of Significant 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 and a portion of the U.S. Department of Agriculture (USDA) Community Facilities Loans and Grants. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or limited as to reimbursement. For the awards related to the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution program (PRF), 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 has a specified Period of Availability and timing of reporting requirements. Entities report into the HRSA PRF Reporting Portal after each Periods deadline to use the funds (i.e., after the end of the Period of Availability). For the awards related to the U.S. Department of Agriculture Community Facilities Loans and Grants the USDA has indicated that the amount of outstanding loans issued under the Community Facilities Loans and Grants must be included in the borrowers Schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule includes $20,859,577 received from the USDA. In accordance with guidance from the USDA, these amounts represent $20,455,277 in outstanding loans at the beginning of the audit period (i.e., the June 30, 2021, balance) and $404,300 of grants that were received and expended during the year ended June 30, 2022. There were no interest subsidies, cash, administrative cost allowances or new loans made or received during the year ended June 30, 2022 (the audit period covered by the Schedule). The balance of the loan as of June 30, 2022 amounted to $20,088,587.

Finding Details

2022-001 - Significant Deficiency in Internal Control 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: 2013 Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria: Section 4.4 of the Community Facilities Direct Loan agreement stipulates that the borrower must maintain funds in accounts in accordance with Section 4 of the Loan Resolution. The Loan Resolution stipulates that the borrower must establish a General Account and Reserve Account. The Reserve account must be funded to an amount equaling or exceeding $1,167,219. Condition and Context: The Association did not have a specific Reserve Account established in accordance with the Loan Resolution. Effect: While the Association did have sufficient funds available to fund the Reserve Account, no such account was established. Cause: The Association did not have sufficient internal controls in place to monitor on-going compliance with loan agreements. 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. We additionally recommend that management establish the required reserve account. View of Responsible Officials: Management agrees with the above noted finding and has implemented sufficient controls to ensure on-going compliance requirements are met. Management is also in the process of establishing the appropriate reserve account.
2022-001 - Significant Deficiency in Internal Control 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: 2013 Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria: Section 4.4 of the Community Facilities Direct Loan agreement stipulates that the borrower must maintain funds in accounts in accordance with Section 4 of the Loan Resolution. The Loan Resolution stipulates that the borrower must establish a General Account and Reserve Account. The Reserve account must be funded to an amount equaling or exceeding $1,167,219. Condition and Context: The Association did not have a specific Reserve Account established in accordance with the Loan Resolution. Effect: While the Association did have sufficient funds available to fund the Reserve Account, no such account was established. Cause: The Association did not have sufficient internal controls in place to monitor on-going compliance with loan agreements. 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. We additionally recommend that management establish the required reserve account. View of Responsible Officials: Management agrees with the above noted finding and has implemented sufficient controls to ensure on-going compliance requirements are met. Management is also in the process of establishing the appropriate reserve account.