Audit 322385

2024-003 United States Department Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grant Special Tests and Provisions 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 – During our testing, there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program and there was no formal review of the balance in comparison to the required minimum reserve balance. Cause – The Health Center did not have an adequate internal control policy in place to ensure review and approval over the amount of the reserve fund. Effect – The lack of adequate policies governing review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context – Sampling was not used. The Health Center has one reserve account, which includes the debt service and emergency and replacement reserve, that was tested. Repeat Finding from Prior Years – Yes, Finding 2023-004 Recommendation – We recommend that the Health Center enhance internal control policies to ensure that a formal review over the reserve fund reconciliation and a formal review of the balance in comparison to the required minimum reserve balance be completed by staff separate from the preparer. Views of Responsible Officials – Management agrees with the finding.

2024-003 United States Department Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grant Special Tests and Provisions 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 – During our testing, there was no formal review separate from the preparer over the reserve fund reconciliation for the federal program and there was no formal review of the balance in comparison to the required minimum reserve balance. Cause – The Health Center did not have an adequate internal control policy in place to ensure review and approval over the amount of the reserve fund. Effect – The lack of adequate policies governing review increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs – None reported. Context – Sampling was not used. The Health Center has one reserve account, which includes the debt service and emergency and replacement reserve, that was tested. Repeat Finding from Prior Years – Yes, Finding 2023-004 Recommendation – We recommend that the Health Center enhance internal control policies to ensure that a formal review over the reserve fund reconciliation and a formal review of the balance in comparison to the required minimum reserve balance be completed by staff separate from the preparer. Views of Responsible Officials – Management agrees with the finding.