FAC Explorer

Audit 50082

FY End
2022-06-30
Total Expended
$2.52M
Findings
4
Programs
3
Organization: Leflore County Hospital Authority Dba Eomc (OK)
Year: 2022 Accepted: 2023-05-15
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
42159 2022-007 Material Weakness - N
42160 2022-008 Significant Deficiency - L
618601 2022-007 Material Weakness - N
618602 2022-008 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $2.44M Yes 2
93.697 Covid-19 Testing and Mitigation for Rural Health Clinics $66,943 - 0
93.461 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $16,892 - 0

Contacts

Name Title Type
NH55LZVLCE91 Priacilla Leatherman Auditee
9184582457 Tyler Bernier Auditor
No contacts on file

Notes to SEFA

Title: Loan Program Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting, with the exception for the COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund (Federal Financial Assistance Listing #93.461), which is based on when the claim is eligible evidenced by the receipt of monies from the federal agency. 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 Authority does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Expenditures reported on the schedule consist of the beginning of the year outstanding loan balance plus advances made on the loan during the year. The outstanding balance of the direct loan at June 30, 2022, was $2,370,116.
Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting, with the exception for the COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund (Federal Financial Assistance Listing #93.461), which is based on when the claim is eligible evidenced by the receipt of monies from the federal agency. 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 Authority 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 Leflore County Hospital Authority (Authority), a Component Unit of LeFlore County, Oklahoma 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 Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority.

Finding Details

Finding 2022-007
U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: Article IV of the Authority's Supplemental Bond Indenture agreement dated June 1, 2006, requires the Authority to establish a reserve fund. As approved by the USDA Community Programs Director, the Authority was required to make monthly deposits of $1,350 into the reserve fund beginning in April 2021, until the fund reaches $162,000. Condition: The Authority did not deposit the required funds into the debt service fund until October 2021. In addition, the Authority?s June 2022 payment was not received by the bank until July 11, 2022. Cause: In May 2020, the Authority received approval from the United States Department Agriculture (USDA) to use debt reserve funds in response to the COVID Pandemic. The new management team was not aware of the arrangement with USDA and that deposits to the debt reserve funds were to commence in April 2021. In addition, the June 2022 reserve deposit was not submitted to the bank until July 2022 due to lack of management oversight. Effect: The Authority's reserve account was not in compliance with the Supplemental Bond Indenture and program requirements until October 2021. Additionally, missing or late payments continued to result in noncompliance with program. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: The Authority needs to establish a monthly process to ensure the reserve deposit is made and posted by the bank on a timely basis. Additionally, the Authority should monitor to ensure the reserve fund has an adequate balance based on the requirements. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-008
U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: Section 14 of the Letter of Conditions associated with the program requires the Authority to submit the annual audit within 150 days after year end of the fiscal year and the proposed operating budget and rate schedule for the upcoming fiscal year, 30 days prior to the end of the fiscal year. Condition: The Authority did not file the annual financial audit within 150 days after the end of the fiscal year. Also, the Authority did not submit an operating budget and rate schedule 30 days prior to the beginning of the new fiscal year. Cause: The Authority did not have any controls in place to ensure timely reporting with the USDA. Effect: This resulted in the Authority being out of compliance with the Letter of Conditions. Questioned Costs: None reported Repeat Finding from Prior Years: No Context: No sampling was performed. Recommendation: It is recommended that the Authority establish controls to ensure timely reporting with the USDA based on the requirements outlined in the Letter of Conditions. Views of Responsible Officials: We agree with the auditor?s recommendation.
Finding 2022-007
U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: Article IV of the Authority's Supplemental Bond Indenture agreement dated June 1, 2006, requires the Authority to establish a reserve fund. As approved by the USDA Community Programs Director, the Authority was required to make monthly deposits of $1,350 into the reserve fund beginning in April 2021, until the fund reaches $162,000. Condition: The Authority did not deposit the required funds into the debt service fund until October 2021. In addition, the Authority?s June 2022 payment was not received by the bank until July 11, 2022. Cause: In May 2020, the Authority received approval from the United States Department Agriculture (USDA) to use debt reserve funds in response to the COVID Pandemic. The new management team was not aware of the arrangement with USDA and that deposits to the debt reserve funds were to commence in April 2021. In addition, the June 2022 reserve deposit was not submitted to the bank until July 2022 due to lack of management oversight. Effect: The Authority's reserve account was not in compliance with the Supplemental Bond Indenture and program requirements until October 2021. Additionally, missing or late payments continued to result in noncompliance with program. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: The Authority needs to establish a monthly process to ensure the reserve deposit is made and posted by the bank on a timely basis. Additionally, the Authority should monitor to ensure the reserve fund has an adequate balance based on the requirements. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-008
U.S. Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Reporting Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: Section 14 of the Letter of Conditions associated with the program requires the Authority to submit the annual audit within 150 days after year end of the fiscal year and the proposed operating budget and rate schedule for the upcoming fiscal year, 30 days prior to the end of the fiscal year. Condition: The Authority did not file the annual financial audit within 150 days after the end of the fiscal year. Also, the Authority did not submit an operating budget and rate schedule 30 days prior to the beginning of the new fiscal year. Cause: The Authority did not have any controls in place to ensure timely reporting with the USDA. Effect: This resulted in the Authority being out of compliance with the Letter of Conditions. Questioned Costs: None reported Repeat Finding from Prior Years: No Context: No sampling was performed. Recommendation: It is recommended that the Authority establish controls to ensure timely reporting with the USDA based on the requirements outlined in the Letter of Conditions. Views of Responsible Officials: We agree with the auditor?s recommendation.