Finding 1147834 (2024-002)

Finding: 2024-002 Preparation of the SEFA Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department Agriculture Type of Finding: Noncompliance, Significant deficiency Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. We were requested to draft the Schedule. Cause: Auditor assistance with 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 specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Hospital would not be able to draft a Schedule that is correct without assistance of the auditors. Recommendation: While we recognize 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 internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.