Finding 1134783 (2024-003)

FINDING 2024-003 COMPLETION AND TIMELY FILING OF SINGLE AUDIT REPORTS Federal programs Federal Assistance Listing Number 10.766 U.S. Department of Agriculture (USDA) Direct Award, Community Facilities Loans and Grants Criteria The Hospital is required to have its financial statement and compliance audits completed and filed with the Federal Audit Clearinghouse nine months after the end of the audit period. Condition The Hospital’s financial statement and compliance audits for the June 30, 2024 reporting period were not filed within the required timeline. Cause The Hospital implemented a new accounting and electronic health record (EHR) system in May of 2023 and experienced significant delays in being able to bill and process claims. In addition, there was a cyberattack on the Hospital’s claims processing clearinghouse in February 2024 that took the Hospital offline from processing claims. These two events resulted in the financial statement audit requiring significantly more time to complete. Effect The Hospital was unable to meet the required nine month filing deadline. Questioned costs None. Perspective/Context The majority of the EHR implementation issues and subsequent cyberattack were outside of Hospital management’s control and directly related to issues associated with the accounting and EHR system vendor and Clearinghouse vendor. Hospital management also notified the USDA that the financial statement and compliance audits would be delayed due to these issues. Recommendation We suggest Hospital management continue working with its accounting and EHR system vendor to resolve issues affecting its operating results and suggest Hospital management increase their cyber liability coverage limits. Views of responsible officials and planned corrective actions The financial statement and compliance audit will be filed with the Federal Audit Clearinghouse shortly after issuance.