Finding 1190944 (2025-001)

Section III ‒ Federal Award Findings and Questioned Costs 2025-001 – Policies and Procedures for United Stated Department of Agriculture Reserve Funds Federal Agency United Stated Department of Agriculture (USDA) Federal Assistance Listing Number 10.766 – Community Facilities Loans and Grants Federal Award Identification Number Not available Federal Award Years 2018-2059 Criteria [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness The Medical Center should maintain written policies and procedures for the correct funding of required reserve accounts to ensure compliance with relevant requirements. These policies should also document how the reserve funds may be spent. Condition The Medical Center did not have written policies and procedures for the reserve accounts required by the USDA. Context This finding appears to be an isolated instance. Effect There is a risk that the Hospital may not be in compliance with the requirements of the USDA loan agreements. Cause The Medical Center did not develop written policies and procedures over relevant internal controls. Recommendation We recommend the Medical Center create policies and procedures addressing the USDA reserve account compliance requirements. Views of responsible officials and planned corrective actions We recognize the importance of maintaining formal, written policies and procedures to ensure consistent compliance with USDA reserve account requirements and to provide clear guidance on the authorized use of these funds.