FAC Explorer

Audit 337593

FY End
2024-09-30
Total Expended
$19.84M
Findings
2
Programs
3
Organization: Baraga County Memorial Hospital (MI)
Year: 2024 Accepted: 2025-01-13
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
519102 2024-003 Significant Deficiency Yes N
1095544 2024-003 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
14.128 Mortgage Insurance Hospitals $19.83M Yes 1
93.301 Small Rural Hospital Improvement Grant Program $11,804 - 0
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $1,000 - 0

Contacts

Name Title Type
PGNCNX94VC91 Gail Jestila Auditee
9065243348 Jess Paisley Auditor
No contacts on file

Notes to SEFA

Title: Note 4 - Loan Outstanding Accounting Policies: Note 1 - Basis of Presentation The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of Baraga County Memorial Hospital and Baraga County Extended Care Corporation (collectively referred to as the “Hospital”) under programs of the federal government for the year ended September 30, 2024. 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 (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. Note 2 - Summary of Significant 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. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: Note 3 - U.S. Indirect Cost Rate The Hospital has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Hospital had the following loan balance outstanding at September 30, 2024. The loan balance at October 1, 2023 is included in the federal expenditures in the Schedule.

Finding Details

Finding 2024-003
Significant Deficiency – Outstanding Receivable from Affiliate Federal Agency Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.128 Program Name: Mortgage Insurance for Hospitals Compliance Requirement: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control Over Compliance and Noncompliance Criteria: As part of its loan agreement with HUD, the Hospital is not permitted to hold receivables from affiliated entities that are older than 90 days. Condition: The Hospital has amounts due from affiliate of $697,310 that are older than 90 days as of September 30, 2024. Cause: The Hospital funded significant costs on behalf of affiliate as a result of poor cash flows. The affiliate has been unable to pay the balance back to the Hospital in a timely manner. Effect: The Hospital is in violation of a loan covenant from HUD. The Hospital has implemented a payment plan with affiliate. There will be ten months of $30,000 payments, per month, with a lump sum payment of $433,059 to be paid in March 2025. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: We recommend that management follow its payment plan that is currently in place in order to reduce the outstanding receivable balance from affiliate. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Finding 2024-003
Significant Deficiency – Outstanding Receivable from Affiliate Federal Agency Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.128 Program Name: Mortgage Insurance for Hospitals Compliance Requirement: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control Over Compliance and Noncompliance Criteria: As part of its loan agreement with HUD, the Hospital is not permitted to hold receivables from affiliated entities that are older than 90 days. Condition: The Hospital has amounts due from affiliate of $697,310 that are older than 90 days as of September 30, 2024. Cause: The Hospital funded significant costs on behalf of affiliate as a result of poor cash flows. The affiliate has been unable to pay the balance back to the Hospital in a timely manner. Effect: The Hospital is in violation of a loan covenant from HUD. The Hospital has implemented a payment plan with affiliate. There will be ten months of $30,000 payments, per month, with a lump sum payment of $433,059 to be paid in March 2025. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Year: Yes Recommendation: We recommend that management follow its payment plan that is currently in place in order to reduce the outstanding receivable balance from affiliate. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.