Audit 331222

FY End
2024-06-30
Total Expended
$5.36M
Findings
2
Programs
4
Organization: Platte Health Center (SD)
Year: 2024 Accepted: 2024-12-06
Auditor: Eide Bailly LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
513383 2024-003 Significant Deficiency Yes N
1089825 2024-003 Significant Deficiency Yes N

Programs

Contacts

Name Title Type
PWTLWEPNV5F6 Vicki Jensen Auditee
6053373364 Judon Mettler 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. When applicable, 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 federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Health Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Platte Community Memorial Hospital, Inc. d/b/a Platte Health Center, Inc. (Health Center) under programs of the federal government for the year ended June 30, 2024. 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 the Health Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Health Center.
Title: Community Facilities Loans Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, 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 federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Health Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Expenditures reported in this schedule consist of the beginning of the year outstanding balance for the direct loan and a guaranteed loan. There were no loan advances during the year ended June 30, 2024. The guaranteed loan is guaranteed by the U.S. Department of Agriculture for up to 90% of the loan. Accordingly, total expenditures reported on the schedule under this guaranteed loan represent 90% of the beginning of the year outstanding balance of the loan. The outstanding balances at June 30, 2024 were $3,473,158 for the direct loan and $1,337,318 for the bank loan, of which USDA has guaranteed 90% of the loan balance.

Finding Details

Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants – Guaranteed Loan Special Test 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. The commitment letter for the term loan with the bank requires debt service coverage ratio and working capital to be calculated yearly using audited financial statements. Condition: Management does not have a formally documented review and approval process in place to ensure compliance with the debt service coverage ratio and working capital calculations. Cause: The Health Center calculated the annual debt service coverage ratio as of year‐end and the year‐end financial statements provided the current assets and current liabilities for the working capital calculation; however, there was no formally documented review and approval in place. Effect: The Health Center may have errors in the calculations or be in violation of the debt service coverage ratio and working capital requirements if there is no formal documented review or approval. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: Yes, similar Finding 2023‐003 Recommendation: We recommend management implement a formal documented review and approval process to monitor the debt service coverage ratio and working capital as a part of their year‐end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.
Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants – Guaranteed Loan Special Test 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. The commitment letter for the term loan with the bank requires debt service coverage ratio and working capital to be calculated yearly using audited financial statements. Condition: Management does not have a formally documented review and approval process in place to ensure compliance with the debt service coverage ratio and working capital calculations. Cause: The Health Center calculated the annual debt service coverage ratio as of year‐end and the year‐end financial statements provided the current assets and current liabilities for the working capital calculation; however, there was no formally documented review and approval in place. Effect: The Health Center may have errors in the calculations or be in violation of the debt service coverage ratio and working capital requirements if there is no formal documented review or approval. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: Yes, similar Finding 2023‐003 Recommendation: We recommend management implement a formal documented review and approval process to monitor the debt service coverage ratio and working capital as a part of their year‐end close process to ensure all covenants of the loan are met. Views of Responsible Officials: Management agrees with the finding.