FAC Explorer

Audit 39901

FY End
2022-12-31
Total Expended
$1.08M
Findings
6
Programs
1
Organization: Huerfano County Hospital Dist. D/b/a Spanish Peaks Regional Health Cen (CO)
Year: 2022 Accepted: 2023-09-28
Auditor: Stockman Kast Ryan + CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
41546 2022-001 Material Weakness - P
41547 2022-002 Significant Deficiency Yes P
41548 2022-003 - Yes L
617988 2022-001 Material Weakness - P
617989 2022-002 Significant Deficiency Yes P
617990 2022-003 - Yes L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.08M Yes 3

Contacts

Name Title Type
KMZXYFZJDMF2 Colette Martin Auditee
7197385137 Mike Rowe Auditor
No contacts on file

Notes to SEFA

Title: Subrecipients Accounting Policies: The Schedule of Expenditures of Federal Awards (the schedule) includes the Federal awards activity of Huerfano County Hospital District D/B/A Spanish Peaks Regional Health Center (the District), and is presented on the accrual basis of accounting. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, results of operations, changes in net assets, or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The District provided no federal awards to subrecipients.
Title: Expenditures under CFDA 93.498, Provider Relief Fund Accounting Policies: The Schedule of Expenditures of Federal Awards (the schedule) includes the Federal awards activity of Huerfano County Hospital District D/B/A Spanish Peaks Regional Health Center (the District), and is presented on the accrual basis of accounting. The information in the schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, results of operations, changes in net assets, or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures under CFDA 93.498, Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution applies the guidance of the U.S. Department of Health and Human Services (HHS). The amounts on the schedule are reported based on the portal submission guidelines. Payments from HHS for PRF and ARP are assigned to one of four Payment Received Periods based upon the date each payment from the PRF and ARP was received. Each Period has a specified Period of Availability and timing of reporting requirements. The schedule includes those qualifying expenditures and/or lost revenues that were reported in the portal for Period 4 (Payment Received Periods from July 1, 2021 to December 31, 2021 and Periods of Availability from January 1, 2020 to December 31, 2022). Therefore, the amount presented in this schedule may differ from amounts presented in the basic financial statements.The Schedule includes PRF and ARP activities for Huerfano County Hospital District (TIN: 846027322).The District did not receive any donated federal personal protective equipment (PPE) during the year ended December 31, 2022.

Finding Details

Finding 2022-001
Criteria or Specific Requirement ? Management is responsible for preparing financial statements in accordance with generally accepted accounting principles. Condition ? Material adjusting entries were made to patient accounts receivable, estimated third-party payor settlements and related net patient service revenues. Context ? The patient accounts receivable balance did not reconcile with the patient accounts receivable detail. Settlement activity related to estimated third-party payor settlements was not properly recorded. Cause ? During the year ended December 31, 2022, the District underwent an accounting system conversion, resulting in delays in reporting and reconciliation processes. Effect or Potential Effect ? The District?s internal financial statements were misstated. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend the District ensure that reconciliations to the financial statements are performed timely and the internal financial statements be adjusted accordingly. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and will implement the recommendation.
Finding 2022-002
Criteria or Specific Requirement ? Segregation of duties is an essential element of the internal control structure. Condition ? The District has internal control weaknesses with respect to segregation of duties over cash receipts and disbursements. Context ? As a small rural hospital, the District has limited personnel resulting in limitations on their ability to segregate duties. Cause ? Due to limited personnel, the District has been unable to achieve adequate segregation of duties. Effect or Potential Effect ? The lack of adequate segregation of duties causes the District to be more susceptible to misappropriation of assets. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend that the District implement procedures to mitigate its segregation of duty weaknesses as much as possible including review processes by the Chief Executive Officer and/or Chief Financial Officer. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and will consider controls such as review processes that will mitigate its segregation of duty weaknesses.
Finding 2022-003
Criteria or Specific Requirement ? The District is required to submit filings with The Health Resource and Service Administration (HRSA) under the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution programs. Such filings include reporting COVID-19 costs and lost revenues, as defined. Condition ? The District?s filing with HRSA for Reporting Period 4 contained errors in the amounts reported for lost revenues. Context ? Revenue amounts were used that were prior to audit adjustments and certain net patient service revenues were improperly excluded. Cause ?The District inadvertently used revenue amounts prior to audit adjustments and inadvertently excluded certain net patient service revenues. Effect or Potential Effect ? The lost revenue amounts reported to HRSA for Reporting Period 4 were overstated. The misstatements had no impact on the amount of PRF and ARP funds the District was allowed to retain due to the excess of COVID-19 costs and lost revenues over the amount of PRF and ARP funds received. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend that the District ensure that future filings with HRSA accurately report lost revenues. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and has taken steps to ensure the accuracy of lost revenues in any future filings.
Finding 2022-001
Criteria or Specific Requirement ? Management is responsible for preparing financial statements in accordance with generally accepted accounting principles. Condition ? Material adjusting entries were made to patient accounts receivable, estimated third-party payor settlements and related net patient service revenues. Context ? The patient accounts receivable balance did not reconcile with the patient accounts receivable detail. Settlement activity related to estimated third-party payor settlements was not properly recorded. Cause ? During the year ended December 31, 2022, the District underwent an accounting system conversion, resulting in delays in reporting and reconciliation processes. Effect or Potential Effect ? The District?s internal financial statements were misstated. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend the District ensure that reconciliations to the financial statements are performed timely and the internal financial statements be adjusted accordingly. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and will implement the recommendation.
Finding 2022-002
Criteria or Specific Requirement ? Segregation of duties is an essential element of the internal control structure. Condition ? The District has internal control weaknesses with respect to segregation of duties over cash receipts and disbursements. Context ? As a small rural hospital, the District has limited personnel resulting in limitations on their ability to segregate duties. Cause ? Due to limited personnel, the District has been unable to achieve adequate segregation of duties. Effect or Potential Effect ? The lack of adequate segregation of duties causes the District to be more susceptible to misappropriation of assets. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend that the District implement procedures to mitigate its segregation of duty weaknesses as much as possible including review processes by the Chief Executive Officer and/or Chief Financial Officer. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and will consider controls such as review processes that will mitigate its segregation of duty weaknesses.
Finding 2022-003
Criteria or Specific Requirement ? The District is required to submit filings with The Health Resource and Service Administration (HRSA) under the Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution programs. Such filings include reporting COVID-19 costs and lost revenues, as defined. Condition ? The District?s filing with HRSA for Reporting Period 4 contained errors in the amounts reported for lost revenues. Context ? Revenue amounts were used that were prior to audit adjustments and certain net patient service revenues were improperly excluded. Cause ?The District inadvertently used revenue amounts prior to audit adjustments and inadvertently excluded certain net patient service revenues. Effect or Potential Effect ? The lost revenue amounts reported to HRSA for Reporting Period 4 were overstated. The misstatements had no impact on the amount of PRF and ARP funds the District was allowed to retain due to the excess of COVID-19 costs and lost revenues over the amount of PRF and ARP funds received. Questioned Costs ? There are no questioned costs. Recommendation ? We recommend that the District ensure that future filings with HRSA accurately report lost revenues. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the finding and has taken steps to ensure the accuracy of lost revenues in any future filings.