FAC Explorer

Audit 346603

FY End
2024-09-30
Total Expended
$39.31M
Findings
2
Programs
1
Organization: Cloud County Health Center, Inc. (KS)
Year: 2024 Accepted: 2025-03-18
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
528637 2024-004 Significant Deficiency Yes N
1105079 2024-004 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $39.31M Yes 1

Contacts

Name Title Type
SLB6MM5UALU7 Ron Harrington Auditee
7852438430 Tyler Bernier Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Expenditures reported in 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 Medical Center does not draw indirect costs 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 Cloud County Health Center, Inc. d/b/a North Central Kansas Medical Center (Medical Center) under programs of the federal government for the year ended September 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 Medical Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Medical Center.
Title: Note 4 - Loan Programs Accounting Policies: Expenditures reported in 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 Medical Center does not draw indirect costs and has not elected to use the 10% de minimis cost rate. Expenditures in this schedule consist of the beginning of the year outstanding loans balance plus advances made on the loans during the year. There were no advances made on the loans during the year ended September 30, 2024. The outstanding balance of the loans at September 30, 2024, was $38,639,822.

Finding Details

Finding 2024-004
U.S. Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Applicable Federal Award Number – Direct Loan and Guaranteed Loan Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material 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 Medical Center was required to establish reserve accounts with deposits equal to 10% of the annual debt service requirement on the direct loan and guaranteed loan for the entire year. The Medical Center did not establish these accounts until August 2024. Although the reserve was fully funded by year-end, the reserve was not funded the entire year, as required. Cause: This deficiency is due to a misunderstanding of establishing reserve accounts as Salina Regional Health Center is the centralized cash management agent for the Medical Center. Once this was identified, the Medical Center worked with the bank to establish a reserve. Effect: The Medical Center was not in compliance with the terms of the loan agreements related to the reserve funds until August 2024. Questioned Costs: None. Context: Sampling was not used. Repeat Finding from Prior Years: Yes. Recommendation: We recommend management implement a control process to ensure the reserve is fully funded throughout the entire year. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-004
U.S. Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Applicable Federal Award Number – Direct Loan and Guaranteed Loan Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material 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 Medical Center was required to establish reserve accounts with deposits equal to 10% of the annual debt service requirement on the direct loan and guaranteed loan for the entire year. The Medical Center did not establish these accounts until August 2024. Although the reserve was fully funded by year-end, the reserve was not funded the entire year, as required. Cause: This deficiency is due to a misunderstanding of establishing reserve accounts as Salina Regional Health Center is the centralized cash management agent for the Medical Center. Once this was identified, the Medical Center worked with the bank to establish a reserve. Effect: The Medical Center was not in compliance with the terms of the loan agreements related to the reserve funds until August 2024. Questioned Costs: None. Context: Sampling was not used. Repeat Finding from Prior Years: Yes. Recommendation: We recommend management implement a control process to ensure the reserve is fully funded throughout the entire year. Views of Responsible Officials: Management agrees with the finding.