2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.
2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.
2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.
2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.
2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.
2023-003 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
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 (the schedule) and accompanying notes to the schedule.
Condition: The Hospital does not have an internal control system designed to provide for the preparation of the
schedule and notes to the schedule. As auditors, we were requested to assist with the preparation of the
schedule and notes to the schedule.
Cause: Auditor assistance with the 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 specific threshold of
federal expenditures.
Effect: There is a reasonable possibility that the Hospital would not be able to draft the schedule and notes to
the schedule that are correct without the assistance of the auditors.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-003
Recommendation: While we recognized that this condition is not unusual for an organization with limited
staffing, 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.
2023-004 Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Special Test and Provisions
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 awards. Section 4 of the loan resolution security
agreements dated September 2, 2008 and March 10, 2010 states the Hospital must set aside a reserve amount
each month until the specified account balance is reached.
Condition: The Hospital’s reserve account is fully funded per the requirements in the loan resolution agreement.
However, there is no documented secondary monitoring of the account balance as compared to the required
minimum balance.
Cause: The Hospital did not have a formal review or approval process in place. The balance is disclosed to the
board within the financial information provided to the board members, however, there is no comparison of the
reserve fund account balance compared to the required minimum balance.
Effect: The lack of formal review or approval increases the risk of employees participating in the federal award
administration not detecting and correcting noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Sampling was not used.
Repeat Finding from Prior Year: Yes, prior year finding 2022-004.
Recommendation: We recommend that management implement procedures to include monitoring over special
test and provisions related to federal expenditures including a secondary review of the reserve bank account
which may include a comparison of the required balance to the actual balance or documenting the requirement
in the monthly financial information which are provided to the board.
Views of Responsible Officials: Management agrees with the finding.