Audit 8497

FY End

2023-06-30

Total Expended

$48.23M

Findings

2

Programs

3

Organization: Sioux Center Health (IA)

Year: 2023 Accepted: 2023-12-27

Auditor: Eide Bailly Lllp

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
6537	2023-004	Material Weakness	-	AB
582979	2023-004	Material Weakness	-	AB

ALN	Program	Spent	Major	Findings
10.766	Community Facilities Loans and Grants	$25.06M	Yes	0
93.498	Covid-19 Provider Relief Fund	$972,527	Yes	1
93.301	Covid19 Small Rural Hospital Improvement Grant Program	$216,512	-	0

Contacts

Name	Title	Type
L75JNT582HD8	Crystal Richter	Auditee
7127228153	Joy Feige	Auditor
No contacts on file

Notes to SEFA

Title: Community Facilities Loan Program Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Sioux Center Health (the Health Center) under programs of the federal government for the year ended June 30, 2023. 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 Health Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Health Center. Expenditures reported in 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 assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Health Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Expenditures reported in this schedule under the Rural Development Program Community Facilities Loans and Grants consist of the beginning of the year outstanding loan balance plus advances during the year. Series 2019 and Series 2020 Health Facilities Revenue bonds used as interim financing were paid off with the USDA 2022 Direct Loan. During the year, there were advances of $3,210,827 on the Series 2019 Health Facility Revenue Bonds and $64,501 on the 2022 Direct Loan. The outstanding balances at June 30, 2023 for the 2012 Direct Loan was $21,326,717 and $24,289,000 for the 2022 Direct Loan.

Title: Provider Relief Funds Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Sioux Center Health (the Health Center) under programs of the federal government for the year ended June 30, 2023. 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 Health Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Health Center. Expenditures reported in 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 assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Health Center does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Health Center received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) in the amount of $6,247,927, exclusive of any interest earned, as of June 30, 2023. The PRF expenditures are not recognized on the schedule until the expenditures are included in the reporting to HHS as required under the PRF program. In accordance with the 2023 compliance supplement, the PRF expenditures recognized on the schedule are based on reporting to HHS for Period 4, defined as payments received between July 31, 2021 through December 31, 2021, plus interest earned of $6,603. The following summarizes the Provider Relief Funds and the timing of when the amounts were recognized in the financial statements. See table in the report.

Finding Details

Finding 2023-004

Finding 2023-004 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420796764 Activities Allowed or Unallowed and Allowable Costs/Cost 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 Health Center’s final expenditure listing identified as eligible and claimed under the federal program were not reviewed and approved by a separate individual outside of the preparer. Cause: The Health Center had multiple individuals identifying and compiling eligible costs, however, the Health Center did not have an internal control process in place to ensure a secondary review and approval of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing was documented. The summary spreadsheet was used to claim allowable costs under the federal program. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program that may not be accurately completed. Questioned Costs: None reported. Context/Sampling: Summary level testing was performed over general and administrative expenses including payroll. Repeat Finding from Prior Year: No Recommendation: We recommend Health Center implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program. Response: Management agrees with the finding.

Finding 2023-004

Finding 2023-004 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #420796764 Activities Allowed or Unallowed and Allowable Costs/Cost 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 Health Center’s final expenditure listing identified as eligible and claimed under the federal program were not reviewed and approved by a separate individual outside of the preparer. Cause: The Health Center had multiple individuals identifying and compiling eligible costs, however, the Health Center did not have an internal control process in place to ensure a secondary review and approval of eligible expenditures that were summarized from the underlying supporting spreadsheets to the final expenditure listing was documented. The summary spreadsheet was used to claim allowable costs under the federal program. Effect: Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program that may not be accurately completed. Questioned Costs: None reported. Context/Sampling: Summary level testing was performed over general and administrative expenses including payroll. Repeat Finding from Prior Year: No Recommendation: We recommend Health Center implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program. Response: Management agrees with the finding.