FAC Explorer

Audit 323053

FY End
2023-12-31
Total Expended
$20.98M
Findings
6
Programs
2
Organization: St. Vincent General Hospital District (CO)
Year: 2023 Accepted: 2024-09-30
Auditor: Wipfli LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
500274 2023-005 Material Weakness Yes L
500275 2023-006 Material Weakness Yes N
500276 2023-007 Significant Deficiency Yes L
1076716 2023-005 Material Weakness Yes L
1076717 2023-006 Material Weakness Yes N
1076718 2023-007 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $20.93M Yes 3
93.155 Rural Health Research Centers $49,826 - 0

Contacts

Name Title Type
LZLWLKX7NRY3 Kelly Johnston Auditee
9706233752 Wes Thew Auditor
No contacts on file

Notes to SEFA

Title: Note 1: Basis of Presentation Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting and 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. De Minimis Rate Used: N Rate Explanation: N/A - USDA loan program. Monies were spent as received. The accompanying schedule of expenditures of federal awards (“Schedule”) includes the federal award activity of St. Vincent General Hospital District d/b/a St. Vincent Health (the “Hospital”). 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 (the “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 position, or cash flows of the Hospital.
Title: Note 2: Summary of significant accounting policies Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting and 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. De Minimis Rate Used: N Rate Explanation: N/A - USDA loan program. Monies were spent as received. Expenditures on the Schedule are reported on the accrual basis of accounting and 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.
Title: Note 3: Community Facilities Loans and Grants Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting and 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. De Minimis Rate Used: N Rate Explanation: N/A - USDA loan program. Monies were spent as received. The Hospital had outstanding loans with the U.S. Department of Agriculture (USDA) as of December 31, 2023, with a balance of $20,508,988. The loan balance at the beginning of the year was $20,932,538, and is included in the federal expenditures presented on the Schedule. There were no new loans received during the year ended December 31, 2023.
Title: Note 4: Indirect Cost Rate Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting and 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. De Minimis Rate Used: N Rate Explanation: N/A - USDA loan program. Monies were spent as received. The Hospital has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 5: Subrecipients Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting and 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. De Minimis Rate Used: N Rate Explanation: N/A - USDA loan program. Monies were spent as received. The Hospital passed no federal awards through to subrecipients.

Finding Details

Finding 2023-005
Finding: 2023-005 Reporting requirements Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Material weakness Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None Criteria: Under the terms and conditions of the award, the recipient certifies it will provide quarterly financial information, the annual budget, annual financial statements, annual Medicare cost report, and annual debt service reserve calculation to the USDA and the interim financing lender. Condition: The Hospital did not send the annual debt service reserve calculation to the USDA. Cause: The Hospital did not have policies or procedures in place surrounding the required reporting. The Hospital also had turnover in management and has been navigating through a financial crisis. Effect: The Hospital was out of compliance with the terms and conditions of the award during 2023. Recommendation: We recommend management implement policies and procedures surrounding the reporting required under the USDA loan program as well as provide the required reports on a timely basis to all respective parties. View of Responsible Officials: Management agrees with the finding.
Finding 2023-006
Finding: 2023-006 Debt service reserve fund Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Material weakness Compliance Requirement: Special Tests and Provisions Repeat Finding: Yes Questioned Cost: None 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: The Hospital did not establish a debt reserve fund as required by the federal award agreement. In addition, the Hospital did not meet its debt covenants. Cause: The Hospital has experienced a financial crisis where all available monies were used to fund payroll and pay down immediate debts, resulting in the use of any amounts previously reserved. Effect: The lack of adequate policies governing the monitoring of the required debt covenants and the establishment and funding of reserves increases the risk that employees may not be able to detect and correct noncompliance in a timely manner. Recommendation: We recommend the Hospital establish the required debt reserve fund as soon as possible and provide funds in accordance with the federal award agreement. We also recommend the Hospital create internal controls to monitor debt covenants. View of Responsible Officials: Management agrees with the finding.
Finding 2023-007
Finding: 2023-007 Preparation of the SEFA Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department Agriculture Type of Finding: Noncompliance, Significant deficiency Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None 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: The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft a Schedule that is correct without assistance of the auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Hospital’s Schedule and internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.
Finding 2023-005
Finding: 2023-005 Reporting requirements Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Material weakness Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None Criteria: Under the terms and conditions of the award, the recipient certifies it will provide quarterly financial information, the annual budget, annual financial statements, annual Medicare cost report, and annual debt service reserve calculation to the USDA and the interim financing lender. Condition: The Hospital did not send the annual debt service reserve calculation to the USDA. Cause: The Hospital did not have policies or procedures in place surrounding the required reporting. The Hospital also had turnover in management and has been navigating through a financial crisis. Effect: The Hospital was out of compliance with the terms and conditions of the award during 2023. Recommendation: We recommend management implement policies and procedures surrounding the reporting required under the USDA loan program as well as provide the required reports on a timely basis to all respective parties. View of Responsible Officials: Management agrees with the finding.
Finding 2023-006
Finding: 2023-006 Debt service reserve fund Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Material weakness Compliance Requirement: Special Tests and Provisions Repeat Finding: Yes Questioned Cost: None 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: The Hospital did not establish a debt reserve fund as required by the federal award agreement. In addition, the Hospital did not meet its debt covenants. Cause: The Hospital has experienced a financial crisis where all available monies were used to fund payroll and pay down immediate debts, resulting in the use of any amounts previously reserved. Effect: The lack of adequate policies governing the monitoring of the required debt covenants and the establishment and funding of reserves increases the risk that employees may not be able to detect and correct noncompliance in a timely manner. Recommendation: We recommend the Hospital establish the required debt reserve fund as soon as possible and provide funds in accordance with the federal award agreement. We also recommend the Hospital create internal controls to monitor debt covenants. View of Responsible Officials: Management agrees with the finding.
Finding 2023-007
Finding: 2023-007 Preparation of the SEFA Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department Agriculture Type of Finding: Noncompliance, Significant deficiency Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None 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: The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft a Schedule that is correct without assistance of the auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Hospital’s Schedule and internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.