FAC Explorer

Audit 327167

FY End
2022-12-31
Total Expended
$10.23M
Findings
4
Programs
4
Organization: Minneola District Hospital No. 2 (KS)
Year: 2022 Accepted: 2024-11-04
Auditor: Dza PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
504579 2022-002 Material Weakness - N
504580 2022-003 Material Weakness - L
1081021 2022-002 Material Weakness - N
1081022 2022-003 Material Weakness - L

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $9.24M Yes 2
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $426,989 - 0
93.697 Covid-19 Testing and Mitigation for Rural Health Clinics $300,000 - 0
93.301 Small Rural Hospital Improvement Grant Program $257,367 - 0

Contacts

Name Title Type
EDJJSV6A9BF4 Debbie Bruner Auditee
6208853033 Shaun Johnson Auditor
No contacts on file

Notes to SEFA

Title: 1. 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. The District has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Minneola Hospital District No. 2 (the District) under programs of the federal government for the year ended December 31, 2022. Amounts reported on the Schedule for Federal Assistance Listing Number 93.498 – Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution are based upon the December 31, 2022 Provider Relief Fund report. The information in the 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 the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District.
Title: Direct Loans 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. The District has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The District has not elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Direct loans outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. The related loan balances of the direct loans at December 31, 2022, was $9,080,405.

Finding Details

Finding 2022-002
2022-002 Special Tests and Provisions Federal Agency United States Department of Agriculture Assistance Listing Number 10.766 – Community Facilities Loans and Grants Criteria [ ] Significant Deficiency [X] Material Weakness [X] Compliance Finding Under the terms and conditions of the District’s loan with the United States Department of Agriculture (USDA), the District is required to maintain separate accounts for annual debt service, as well as a debt reserve account with monthly deposits until a specified balance is reached. Condition The District’s annual debt service account is co-mingled with capital reserves. The District has not established or funded a debt reserve account. Context This finding appears to be an isolated problem. Cause The District’s internal controls over compliance did not include adequate controls over maintenance of annual debt service and debt reserve funds. The District has not established policies and procedures over compliance with Uniform Guidance and USDA compliance requirements. Effect The District is not in compliance with the USDA compliance requirements and the terms and conditions of the loan. Recommendation We recommend the District establish separate general ledger accounts for annual debt service and debt reserve funds. We also recommend the District make monthly deposits to the debt reserve fund as required by the terms and conditions of the loan. Written policies and procedures should be established related to Uniform Guidance and USDA compliance requirements. Views of responsible officials and planned corrective actions The District will open a new bank account that will hold the debt reserve amount. A deposit into the debt reserve account will be made monthly via auto transfer on the 10th of each month until December 2027. There will be one withdrawal from this account done annually to transfer funds to a CD. The annual payment amount will have its own account with the amount of the next years’ payment.
Finding 2022-003
2022-003 Reporting Federal Agency United States Department of Agriculture Assistance Listing Number 10.766 – Community Facilities Loans and Grants Criteria [ ] Significant Deficiency [X] Material Weakness [X] Compliance Finding Under the terms and conditions of the District’s loan with the United States Department of Agriculture (USDA), the District is required to submit annual audited financial statements to the USDA. Condition There is no evidence of audited financial statements being submitted to the USDA during 2022. Context This finding appears to be an isolated problem. Cause Correspondence records between the District and the USDA in 2022 were not retained. Effect The District is not in compliance with the USDA compliance requirements and the terms and conditions of the loan. Recommendation We recommend the District submit annual audited financial statements to the USDA in a timely manner after they are issued. We also recommend the District retain all future correspondence with the USDA regarding the submission of audited financial statements. Views of responsible officials and planned corrective actions The District will save the emails that show they sent the audit to the USDA in the audit folder.
Finding 2022-002
2022-002 Special Tests and Provisions Federal Agency United States Department of Agriculture Assistance Listing Number 10.766 – Community Facilities Loans and Grants Criteria [ ] Significant Deficiency [X] Material Weakness [X] Compliance Finding Under the terms and conditions of the District’s loan with the United States Department of Agriculture (USDA), the District is required to maintain separate accounts for annual debt service, as well as a debt reserve account with monthly deposits until a specified balance is reached. Condition The District’s annual debt service account is co-mingled with capital reserves. The District has not established or funded a debt reserve account. Context This finding appears to be an isolated problem. Cause The District’s internal controls over compliance did not include adequate controls over maintenance of annual debt service and debt reserve funds. The District has not established policies and procedures over compliance with Uniform Guidance and USDA compliance requirements. Effect The District is not in compliance with the USDA compliance requirements and the terms and conditions of the loan. Recommendation We recommend the District establish separate general ledger accounts for annual debt service and debt reserve funds. We also recommend the District make monthly deposits to the debt reserve fund as required by the terms and conditions of the loan. Written policies and procedures should be established related to Uniform Guidance and USDA compliance requirements. Views of responsible officials and planned corrective actions The District will open a new bank account that will hold the debt reserve amount. A deposit into the debt reserve account will be made monthly via auto transfer on the 10th of each month until December 2027. There will be one withdrawal from this account done annually to transfer funds to a CD. The annual payment amount will have its own account with the amount of the next years’ payment.
Finding 2022-003
2022-003 Reporting Federal Agency United States Department of Agriculture Assistance Listing Number 10.766 – Community Facilities Loans and Grants Criteria [ ] Significant Deficiency [X] Material Weakness [X] Compliance Finding Under the terms and conditions of the District’s loan with the United States Department of Agriculture (USDA), the District is required to submit annual audited financial statements to the USDA. Condition There is no evidence of audited financial statements being submitted to the USDA during 2022. Context This finding appears to be an isolated problem. Cause Correspondence records between the District and the USDA in 2022 were not retained. Effect The District is not in compliance with the USDA compliance requirements and the terms and conditions of the loan. Recommendation We recommend the District submit annual audited financial statements to the USDA in a timely manner after they are issued. We also recommend the District retain all future correspondence with the USDA regarding the submission of audited financial statements. Views of responsible officials and planned corrective actions The District will save the emails that show they sent the audit to the USDA in the audit folder.