Finding 1144466 (2024-002)

2024-002 USDA REQUIREMENTS Federal Agency: U.S. Department of Agriculture Program Title: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Award Period: January 1, 2024 to December 31, 2024 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the terms and conditions of the agreements with the USDA the Hospital is required to meet minimum requirements of Historical Debt Service Coverage Ratio of 1.25. Condition: The Hospital failed to meet the minimum Historical Debt Service Coverage Ratio for the year ended December 31, 2024. Questioned costs: None Cause: The Hospital has experienced financial challenges since the inflationary pressures associated with the COVID-19 pandemic which has negatively impacted operating results. Effect: The Hospital is not in compliance with the terms and conditions of the agreement. Recommendation: Management should continue to focus on making operational improvements to achieve the minimum level of Historical Debt Service Coverage of 1.25, as required. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management has worked with the USDA to receive a waiver related to the noncompliance with the Historical Debt Service Coverage Ratio.