Audit 314639

FY End

2023-09-30

Total Expended

$30.87M

Findings

2

Programs

2

Organization: Mille Lacs Health System (MN)

Year: 2023 Accepted: 2024-07-09

Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
477942	2023-003	Material Weakness	-	L
1054384	2023-003	Material Weakness	-	L

ALN	Program	Spent	Major	Findings
10.766	Community Facilities Loans and Grants	$29.65M	Yes	0
93.498	Provider Relief Fund	$1.23M	-	1

Contacts

Name	Title	Type
L9GCXEGYCB43	Andy Knutson	Auditee
3205322581	Brandon Mickelson	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. 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 funds were identified as having been provided to subrecipients by the Hospital and accordingly, no funds identified in the Schedule are attributable to subrecipient entities. There were no federal awards expended for noncash assistance or insurance. Mille Lacs Health System did not elect to use the de minimis 10% indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Mille Lacs Health System did not elect to use the de minimis 10% indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Mille Lacs Health System 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 Title2 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 Mille Lacs Health System, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Mille Lacs Health System.

Title: OTHER MATTERS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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 funds were identified as having been provided to subrecipients by the Hospital and accordingly, no funds identified in the Schedule are attributable to subrecipient entities. There were no federal awards expended for noncash assistance or insurance. Mille Lacs Health System did not elect to use the de minimis 10% indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Mille Lacs Health System did not elect to use the de minimis 10% indirect cost rate as allowed under the Uniform Guidance. Amount of Noncash Assistance None Amount of Insurance None Amount of Loans Outstanding $29,316,557 Amount of Loan Guarantees None Amount Provided to Subrecipients None

Finding Details

Finding 2023-003

Finding Type – Material Weakness 2023-003 Criteria – Management should ensure that the grants awards submitted from the Organization are reported accurately to HRSA. Condition – It was noted that there were $317,730 of distributions reported on the portal submission as healthcare expenses in which management did not keep detailed support. Context – There were no material effects to the overall financial statements. Cause – Lack of review of the submission to determine that the grant award was submitted as intended and detail kept to support it. Questioned Costs – $317,730 Effect – As a result of this issue, the amount of grants reported on the submission under the expenditures section of the portal were not supportable. Recommendation – We recommend adequate controls be put in place to ensure accurate reporting of grant funds received. Views of Responsible Officials – Management acknowledges that they did not keep detail of the $317,730 of reported healthcare expenses, but does have unused lost revenues exceeding $1 million to cover it.

Finding 2023-003

Finding Type – Material Weakness 2023-003 Criteria – Management should ensure that the grants awards submitted from the Organization are reported accurately to HRSA. Condition – It was noted that there were $317,730 of distributions reported on the portal submission as healthcare expenses in which management did not keep detailed support. Context – There were no material effects to the overall financial statements. Cause – Lack of review of the submission to determine that the grant award was submitted as intended and detail kept to support it. Questioned Costs – $317,730 Effect – As a result of this issue, the amount of grants reported on the submission under the expenditures section of the portal were not supportable. Recommendation – We recommend adequate controls be put in place to ensure accurate reporting of grant funds received. Views of Responsible Officials – Management acknowledges that they did not keep detail of the $317,730 of reported healthcare expenses, but does have unused lost revenues exceeding $1 million to cover it.