Condition: The District did not meet its financial covenants required under the program during the year, and we, as the auditors, were unable to properly calculate the required financial covenants because of potential missing or misstated financial statement information due to the adverse opinion on...
Condition: The District did not meet its financial covenants required under the program during the year, and we, as the auditors, were unable to properly calculate the required financial covenants because of potential missing or misstated financial statement information due to the adverse opinion on the 2022 financial statements and related disclaimer of opinion included in our accompanying 2023 Independent Auditor's report.
Response: The hospital has financial covenants including:
• Maintaining 35 days cash on hand. We are currently at 26 Days Cash on Hand. The hospital has been as low as 6 Days Cash on Hand.
To increase our Cash on Hand, we have brought all Revenue Cycle efforts in house, trained new staff, formed cross functional teams with the clinical documentation staff, set goals and work weekly with our teams to gently resolve challenges and move forward.
These efforts have rewarded the hospital with increased Days Cash on Hand and improved quality processes in Revenue Cycle.
• Lack of account reconciliation causing large numbers of year end entries. The accounting staff were not involved in Balance Sheet account reconciliation. These accounts are now being reconciled and monitored monthly.
The GASB 87 rules were not adopted due to the staff not being trained. Upon our switch to WIPFLI as our new auditors, we have adopted GASB 87 (starting in FY 2023). In addition, we make the GASB 87 adjustments monthly.
• One covenant requires that we maintain strong internal controls. Since the new administration have begun, each month, new internal controls are being established throughout the hospital, Finance department, Materials Management and the Revenue Cycle.
• On covenant requires a positive bottom line. The hospital has been loosing money primarily due to the change in administration, lack of routine processes, recruitment challenges, lack of accuracy in our accounting and revenue cycle.
Throughout the hospital and RHC’s, improvement teams are working to both improve quality processes, reduce costs, establish a culture to allow recruitment and improve our bottom line.
The hospital has been transparent with the agency and our Board of Directors throughout our change process. More work continues.
Segregation of duties
We have a small staff. However, we have carefully been analyzing the duties and capabilities of each person. Then we have made changes to increase the segregation of duties to improve our internal controls. We improve internal controls with monthly goals. We will continue to both develop our staff, analyze segregation of duties and tighten our internal controls. We are very proud of our accomplishments.
Access Internal Controls
The previous administration did not have focused reviews of access to data.
We have starting in FY 2024 created a team approach to reviewing job functions, access to information and the limits we need to place on the access. One of the findings has been that we had too many people with edit access to areas that were not essential to their job duties.
We meet bi-monthly and review roles, data requirements and view only or edit capabilities. The process is arduous and slow, but we are steadily make progress. There have been revisions, surprises and accomplishment.
Responsible Party: Meagan Weber, CEO, Carolyn Davies, CFO & Brent Peirick, COO
Estimated Completion Date: 6/30/2026