Audit 362331

Program Name: Community Facilities Loans and Grants Cluster Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Questioned Costs: None Criteria: 2 CFR Part 200.512 requires that, for non-federal entities, “The audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period.” Condition: The federal reporting deadline for the Single Audit reporting package was September 30, 2022; however, Lake Health District did not submit its Single Audit Reporting Package by that date. Cause: Lake Health District was unable to complete the single audit by the deadline due to the documentation not being reconciled and ready for the audit. This resulted in the late submission of the Single Audit reporting package. Effect: Without accurate and timely reporting, the funding agencies are unable to properly oversee the expenditure of Federal awards. Recommendation: We recommend that management implement processes and procedures to identify the required deadlines and related controls to ensure compliance with the deadlines. View of Responsible Officials: Management agrees with the finding above. Management will review the existing accounting policies and procedures and implement additional controls to validate timely submission of reports.

Program Name: Community Facilities Loans and Grants Cluster Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Questioned Costs: 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 District did not establish a debt reserve fund as required by the federal award agreement. Cause: The District lacked a system of internal controls necessary to ensure the reserve fund balance was in compliance with the federal award agreement. Effect: The lack of adequate policies governing the monitoring of the required debt covenants and the establishment and funding reserves increases the risk that employees may not be able to detect and correct noncompliance in a timely manner. Recommendation: We recommend that management establish the required reserve fund. View of Responsible Officials: Management agrees with this finding and has committed the resources necessary to maintaining an adequate reserve fund.

Program Name: Community Facilities Loans and Grants Cluster Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Questioned Costs: None Criteria: 2 CFR Part 200.512 requires that, for non-federal entities, “The audit must be completed, and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period.” Condition: The federal reporting deadline for the Single Audit reporting package was September 30, 2022; however, Lake Health District did not submit its Single Audit Reporting Package by that date. Cause: Lake Health District was unable to complete the single audit by the deadline due to the documentation not being reconciled and ready for the audit. This resulted in the late submission of the Single Audit reporting package. Effect: Without accurate and timely reporting, the funding agencies are unable to properly oversee the expenditure of Federal awards. Recommendation: We recommend that management implement processes and procedures to identify the required deadlines and related controls to ensure compliance with the deadlines. View of Responsible Officials: Management agrees with the finding above. Management will review the existing accounting policies and procedures and implement additional controls to validate timely submission of reports.

Program Name: Community Facilities Loans and Grants Cluster Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Questioned Costs: 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 District did not establish a debt reserve fund as required by the federal award agreement. Cause: The District lacked a system of internal controls necessary to ensure the reserve fund balance was in compliance with the federal award agreement. Effect: The lack of adequate policies governing the monitoring of the required debt covenants and the establishment and funding reserves increases the risk that employees may not be able to detect and correct noncompliance in a timely manner. Recommendation: We recommend that management establish the required reserve fund. View of Responsible Officials: Management agrees with this finding and has committed the resources necessary to maintaining an adequate reserve fund.