FAC Explorer

Audit 48518

FY End
2022-06-30
Total Expended
$5.47M
Findings
12
Programs
3
Organization: St. Luke's Hospital (ND)
Year: 2022 Accepted: 2023-03-30
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42881 2022-003 Material Weakness Yes P
42882 2022-003 Material Weakness Yes P
42883 2022-003 Material Weakness Yes P
42884 2022-004 Significant Deficiency - N
42885 2022-003 Material Weakness Yes P
42886 2022-004 Significant Deficiency - N
619323 2022-003 Material Weakness Yes P
619324 2022-003 Material Weakness Yes P
619325 2022-003 Material Weakness Yes P
619326 2022-004 Significant Deficiency - N
619327 2022-003 Material Weakness Yes P
619328 2022-004 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $384,561 Yes 2
93.498 Provider Relief Fund $167,581 - 1
93.301 Small Rural Hospital Improvement Grant Program $159,981 - 1

Contacts

Name Title Type
HHC1WAQT4KE5 Megan Peterson Auditee
7019656384 Renee Gravalin Auditor
No contacts on file

Notes to SEFA

Title: Community Facilities Loan Program Accounting Policies: Expenditures reported on 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 Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Expenditures reported on this Schedule consists of the beginning of the year outstanding loan balance of the Hospitals USDA direct loan of $4,754,420, as well as $384,561, which is 90% of the beginning of the year outstanding balance of the Hospitals USDA guaranteed loan. If applicable, advances made on the loans during the year are reported on the Schedule. The Hospital made no advances on the loans during the year ended June 30, 2022. The Hospitals outstanding loan balances for the direct loan and the guaranteed loan as of June 30,2022 are $4,549,017 and $397,658, respectively.
Title: Basis of Presentation Accounting Policies: Expenditures reported on 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 Hospital 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 St. Luke's Hospital (Hospital) under programs of the federal government for the year ended June 30, 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 Hospital, it is not intended to and does not present the financial position, changes in net assets, or cash flows of theHospital.
Title: Provider Relief Funds and American Rescue Plan (ARP) Rural Distribution Accounting Policies: Expenditures reported on 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 Hospital does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Hospital received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498). The PRF expenditures were recognized on the Schedule when the expenditures were included in the reporting to HHS for Period 2 and Period 3, defined as payments received between July 1, 2020, and June 30, 2021. As the total amount of $167,581 was included on the Period 2 report submitted to HHS, that amount is shown on the accompanying Schedule. The Hospital did not receive or expend any Period 3 funding.

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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 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 and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve 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 Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 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 and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve 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 Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 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 and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve 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 Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. 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 #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the 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 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 and conditions of the award. Condition - During our testing, it was noted that one of the loan reserve accounts was underfunded by approximately $45,000. Cause - The Hospital did not have an adequate internal control policy in place to ensure the proper funding of the reserve account. Effect - Although management obtained a waiver for the noncompliance, the lack of adequate policies governing proper funding of reserve 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 Hospital has two reserve accounts that were tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Hospital enhance internal control policies to ensure that there is proper funding of the reserve accounts. Views of Responsible Officials - Management agrees with the finding.