FAC Explorer

Audit 316547

FY End
2023-08-31
Total Expended
$9.12M
Findings
4
Programs
6
Organization: Baptist Health Deaconess Madisonville, Inc. (KY)
Year: 2023 Accepted: 2024-08-02
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
480321 2023-001 Material Weakness - P
480322 2023-002 Significant Deficiency - AB
1056763 2023-001 Material Weakness - P
1056764 2023-002 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
93.498 Covid-19 Provider Relief Fund $7.51M Yes 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $1.09M - 0
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $256,525 Yes 2
93.107 Area Health Education Centers Point of Service Maintenance and Enhancement Awards $155,163 - 0
93.068 Chronic Diseases: Research, Control, and Prevention $2,500 - 0
93.461 Covid-19 Testing for the Uninsured $2,288 - 0

Contacts

Name Title Type
MELRQG71F5W7 Kimberly Ashby Auditee
2708255781 Ashley Brandt-Duda Auditor
No contacts on file

Notes to SEFA

Title: Provider Relief Funds Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of Baptist Health Deaconess Madisonville (BHD, LLC) under programs of the federal government for the year ended August 31, 2023. 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 BHD, LLC, it is not intended to and does not present the financial position, changes in net assets, or cash flows of BHD, LLC. Expenditures reported on the Schedule are reported on the accrual basis of accounting. When applicable, 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: BHD, LLC does draw for indirect administrative expenses, but has not elected to use the 10% de minimis cost rate. BHD, LLC received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) during the years ended August 31, 2022. BHD, LLC incurred eligible expenditures, including lost revenue. In accordance with the 2023 compliance supplement, the PRF expenditures recognized on the Schedule are based on the reporting to HHS for Periods 4 and 5, defined as payments received during July 1, 2021 to June 30, 2022 of $7,508,013, plus interest earned of $0, as required under the PRF program. The amount of PRF expenditures included on 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, estimating marginal increases in expenses related to coronavirus, and calculating lost revenues. Actual amounts could differ from those estimates.

Finding Details

Finding 2023-001
2023‐001 Department of the Treasury Federal Assistance Listing #21.027 COVID‐19 Claims Coronavirus State and Local Fiscal Recovery Funds 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: Management prepared the Schedule for the year ended August 31, 2023. During the audit process, changes were proposed to include the COVID‐19 Claims Coronavirus State and Local Fiscal Recovery Funds, which were not originally included on the Schedule. Cause: Controls that were in place did not detect a misstatement to the Schedule. Effect: There is a reasonable possibility that misstatements to the Schedule may not be prevented and detected in a timely fashion. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC review and strengthen the controls surrounding the preparation of the Schedule. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-002
2023‐002 Department of the Treasury Federal Assistance Listing #21.027 COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 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: BHD, LLC calculated their indirect cost rate based on the total grant budget and took an equal amount of that per month instead of calculating the indirect cost rate per direct expenditures for each month. Cause: BHD, LLC did not have an internal control process in place to ensure the correct amounts of indirect costs were requested based on the direct costs for the same period. Effect: Without an effective internal control process in place, improper costs could be charged to the program. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 10 indirect expenditures were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC enhance internal control procedures to ensure the indirect cost rate is applied against the monthly direct costs when requestion program reimbursements. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-001
2023‐001 Department of the Treasury Federal Assistance Listing #21.027 COVID‐19 Claims Coronavirus State and Local Fiscal Recovery Funds 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: Management prepared the Schedule for the year ended August 31, 2023. During the audit process, changes were proposed to include the COVID‐19 Claims Coronavirus State and Local Fiscal Recovery Funds, which were not originally included on the Schedule. Cause: Controls that were in place did not detect a misstatement to the Schedule. Effect: There is a reasonable possibility that misstatements to the Schedule may not be prevented and detected in a timely fashion. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC review and strengthen the controls surrounding the preparation of the Schedule. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-002
2023‐002 Department of the Treasury Federal Assistance Listing #21.027 COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Activities Allowed or Unallowed and Allowable Costs/Cost Principles 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 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: BHD, LLC calculated their indirect cost rate based on the total grant budget and took an equal amount of that per month instead of calculating the indirect cost rate per direct expenditures for each month. Cause: BHD, LLC did not have an internal control process in place to ensure the correct amounts of indirect costs were requested based on the direct costs for the same period. Effect: Without an effective internal control process in place, improper costs could be charged to the program. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 10 indirect expenditures were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC enhance internal control procedures to ensure the indirect cost rate is applied against the monthly direct costs when requestion program reimbursements. Views of Responsible Officials: Management agrees with the finding.