FAC Explorer

Audit 55028

FY End
2022-12-31
Total Expended
$5.03M
Findings
4
Programs
3
Organization: Delta County Memorial Hospital (CO)
Year: 2022 Accepted: 2023-10-01
Auditor: Eide Bailly LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
58864 2022-004 Material Weakness Yes ABL
58865 2022-005 Material Weakness - AB
635306 2022-004 Material Weakness Yes ABL
635307 2022-005 Material Weakness - AB

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $3.87M Yes 1
10.766 Community Facilities Loans and Grants $1.00M Yes 1
93.301 Small Rural Hospital Improvement Grant Program $159,759 - 0

Contacts

Name Title Type
YVXTC1KADLC5 Larin Jones Auditee
9708742280 Ashley Brandt-Duda Auditor
No contacts on file

Notes to SEFA

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 hasbeen provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Delta County Memorial Hospital District d/b/a Delta County Memorial Hospital (the Hospital) 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 Hospital, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Hospital.
Title: Provider Relief Funds 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 hasbeen provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Hospital received amounts from the U.S. Department of Health and Human Services (HHS) through the COVID19 Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) during the year ended December 31, 2021. The Hospital incurred eligible expenditures, including lost revenue, and therefore, recognized revenues totaling $3,873,002 during the year ended December 31, 2021 on the financial statements. PRF expenditures were recognized on the Schedule when the lost revenue was included in the reporting to HHS for Period 3, defined as payments between January 1, 2021 and June 30, 2021 as well as Period 4, defined as payments between July 1, 2021 and December 31, 2021. As the total amount of $3,873,002 was included on the Period 4 report submitted to HHS, that amount is shown on the accompanying Schedule. The Hospital did not receive funds during the Period 3 reporting required and as such, did not file a report with HHS for Period 3.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 amounts 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 2022-004
2022-004 Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #840428757 Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting Material Weakness 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 ? The Hospital?s calculation of lost revenue claimed under the federal program as an allowable cost contained no formal review or approval by a separate individual outside of the preparer. This led to an improper offset of lost revenues. In addition, there was no evidence retained that the Hospital?s special report submitted to the Department of Health and Human Services for Period 4 was reviewed and approved by a separate individual outside of the preparer. Cause ? The Hospital did not have an adequate internal control policy in place to ensure review and approval of the calculation of lost revenue or preparation of HHS Period 4 reporting was documented. Effect ? The lack of adequate policies governing review and approval 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 ? The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Year - Yes, 2021-004 Recommendation ? We recommend that the Hospital enhance internal control policies to ensure that formal documentation of review and approval is present. Views of Responsible Officials ? Management agrees with the finding.
Finding 2022-005
2022-005 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Activities Allowed or Unallowed and Allowable Costs/Costs Principles Material Weakness 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 ? The Hospital?s calculation of lost revenue claimed under the federal program as an allowable cost contained no formal review or approval by a separate individual outside of the preparer. Cause ? The Hospital did not have an adequate internal control policy in place to ensure review and approval of the calculation of lost revenue that was utilized during the USDA application process. Effect ? The lack of adequate policies governing review and approval 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 ? The lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Year - No Recommendation ? We recommend that the Hospital enhance internal control policies to ensure that formal documentation of review and approval is present. Views of Responsible Officials ? Management agrees with the finding.
Finding 2022-004
2022-004 Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #840428757 Activities Allowed or Unallowed, Allowable Costs/Costs Principles, and Reporting Material Weakness 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 ? The Hospital?s calculation of lost revenue claimed under the federal program as an allowable cost contained no formal review or approval by a separate individual outside of the preparer. This led to an improper offset of lost revenues. In addition, there was no evidence retained that the Hospital?s special report submitted to the Department of Health and Human Services for Period 4 was reviewed and approved by a separate individual outside of the preparer. Cause ? The Hospital did not have an adequate internal control policy in place to ensure review and approval of the calculation of lost revenue or preparation of HHS Period 4 reporting was documented. Effect ? The lack of adequate policies governing review and approval 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 ? The lost revenue calculation for all applicable quarters was tested and key line items were tested on the Period 4 Department of Health and Human Services special report. Repeat Finding from Prior Year - Yes, 2021-004 Recommendation ? We recommend that the Hospital enhance internal control policies to ensure that formal documentation of review and approval is present. Views of Responsible Officials ? Management agrees with the finding.
Finding 2022-005
2022-005 Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Activities Allowed or Unallowed and Allowable Costs/Costs Principles Material Weakness 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 ? The Hospital?s calculation of lost revenue claimed under the federal program as an allowable cost contained no formal review or approval by a separate individual outside of the preparer. Cause ? The Hospital did not have an adequate internal control policy in place to ensure review and approval of the calculation of lost revenue that was utilized during the USDA application process. Effect ? The lack of adequate policies governing review and approval 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 ? The lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Year - No Recommendation ? We recommend that the Hospital enhance internal control policies to ensure that formal documentation of review and approval is present. Views of Responsible Officials ? Management agrees with the finding.