FAC Explorer

Audit 39287

FY End
2022-12-31
Total Expended
$1.67M
Findings
6
Programs
5
Organization: Northwood Deaconess Health Center (ND)
Year: 2022 Accepted: 2023-10-01
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
43007 2022-003 Material Weakness Yes P
43008 2022-003 Material Weakness Yes P
43009 2022-004 Significant Deficiency - N
619449 2022-003 Material Weakness Yes P
619450 2022-003 Material Weakness Yes P
619451 2022-004 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $1.28M Yes 2
93.155 Rural Health Research Centers $248,400 - 1
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $100,000 - 0
93.498 Provider Relief Fund $32,014 - 0
93.301 Small Rural Hospital Improvement Grant Program $10,513 - 0

Contacts

Name Title Type
GT6BQCALMK18 Brock Sherva Auditee
7015876060 Brad Dejong Auditor
No contacts on file

Notes to SEFA

Title: 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 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 loan balance of the Health Centers USDA direct loan. Th Health Centers outstanding loan balance for the USDA direct loan at December 31, 2022 was $1,233,226.
Title: 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 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 Northwood Deaconess Health Center (Health Center) under programs of the federal government for the year ended December 31, 2022. 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: COVID-19 Provider Relief Funds and American Rescue Plan (ARP) Rural Distrib 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 Health Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Health Center received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498). The PRF expenditures are recognized on the Schedule when the expenditures were included in the reporting to HHS for Period 3, defined as payments received between January 1, 2021 and June 30, 2021. As the total amount of $32,014 was included in the Period 3 report submitted to HHS, that amount is shown on the accompanying Schedule.The total amount of PRF expenditures included on the Schedule requires management to make estimates and assumptions that affect the reported amounts. Accordingly, such expenditures are considered a significant estimate. Estimates and assumptions may include reducing actual expenses by amount that have been reimbursed or are obligated to be reimbursed by other sources and estimating marginal increases in expensesrelated to coronavirus. Actual amounts could differ from those estimates.

Finding Details

Finding 2022-003
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.155 Rural Health Research Centers Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Health Center does not have an internal control system designed to allow for a complete and accurate Schedule. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility the Health Center would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding From Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the financial reporting requirements relating to the Health Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-003
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.155 Rural Health Research Centers Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Health Center does not have an internal control system designed to allow for a complete and accurate Schedule. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility the Health Center would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding From Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the financial reporting requirements relating to the Health Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-004
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests 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. Condition: During our testing, there was no formal documented review over the reserve fund reconciliation for the federal program. Cause: The Health Center did not have an adequate internal control policy in place to ensure review and approval over the reserve fund was maintained. Effect: The lack of adequate policies governing the review and approval of the reserve fund increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: Sampling was not used. The Health Center has one reserve account that was tested. Repeat Finding From Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure that formal documentation of reviews are present. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-003
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.155 Rural Health Research Centers Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Health Center does not have an internal control system designed to allow for a complete and accurate Schedule. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility the Health Center would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding From Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the financial reporting requirements relating to the Health Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-003
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.155 Rural Health Research Centers Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Health Center does not have an internal control system designed to allow for a complete and accurate Schedule. We were requested to draft the Schedule. Cause: Auditor assistance with preparation of the Schedule is not unusual, as the Schedule has unique and specialized requirements and preparation is only required when the Health Center meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility the Health Center would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding From Prior Years: Yes Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend that management be aware of the financial reporting requirements relating to the Health Center?s schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-004
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests 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. Condition: During our testing, there was no formal documented review over the reserve fund reconciliation for the federal program. Cause: The Health Center did not have an adequate internal control policy in place to ensure review and approval over the reserve fund was maintained. Effect: The lack of adequate policies governing the review and approval of the reserve fund increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: Sampling was not used. The Health Center has one reserve account that was tested. Repeat Finding From Prior Years: No Recommendation: We recommend that the Health Center enhance internal control policies to ensure that formal documentation of reviews are present. Views of Responsible Officials: Management agrees with the finding.