Finding Text
S3800-010 Finding Reference Number – 2025-003 S3800-011 Title and CFDA Number of Federal Program – Section 232 Loan – Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes and Assisted Living Facilities Loan, ALN 14.129 S3800-015 Type of Finding – Federal Award Finding; Other Matters S3800-016 Finding Resolution Status – Resolved S3800-017 Information on Universe Population Size The total population was all disbursements from the bank accounts, 1,166 checks or transfers totaling $9,963,223. S3800-018 Sample Size Information The sample size was 59 disbursements totaling $421,877. Errors were found on 2 out of the 59 disbursements tested totaling $2,071. S3800-019 Identification of Repeat Finding and Finding Reference Number – N/A S3800-020 Criteria – Per 2 CFR sections 200.302 and 200.303 of the Uniform Guidance, an entity must establish and maintain effective internal control over the federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. Allowable cost controls of Cheney Care Community require general ledger account coding to be written on each invoice to be reviewed by the Executive Director before the invoice is processed to be paid. S3800-030 Statement of Condition – During our audit, we noted two invoices whereby the amounts paid for by Cheney Care Community did not match the split by location on the campus or the invoice was not for the business purpose of Cheney Care Community. This resulted in Cheney Care Community paying for expenditures that were unrelated to the project. In addition, we noted one invoice where the invoice did not include the general ledger account coding. S3800-032 Cause – During the year ended September 30, 2025, there was turnover in the accounts payable position. As a result, errors were made during the cash disbursement process that were not caught by management’s review and monitoring procedures. S3800-033 Effect or Potential Effect – Failure to maintain effective internal controls over compliance with federal requirements increases the risk of unauthorized or unallowable transactions occurring. S3800-035 Auditor Non-Compliance Code – S (Internal Controls) S3800-037 FHA/Contract Number – 171-22029 S3800-038 Questioned Costs – $0 S3800-040 Questioned Costs – $0 S3800-045 Reporting Views of Responsible Officials – Cheney Care Community is in agreement with the findings, and the recommendations will be implemented. S3800-050 Context – A sample of 59 checks totaling $421,877 was selected for audit from a population of 1,166 checks totaling $9,963,223. The test found 2 checks that were not in compliance with Cheney Care Community’s allowable cost controls totaling $2,071. Our sample was a statistically valid sample. S3800-080 Recommendation – We recommend the related parties reimburse Cheney Care Community for the expenditures paid on their behalf. In addition, we recommend management review the disbursements made during the periods of turnover to confirm there were no other unallowable payments made. We also recommend management of Cheney Care Community review their internal controls over the cash disbursement process with the necessary individuals involved in the process to ensure the controls are consistently performed going forward. S3800-090 Auditor’s Summary of Auditee Comments on the Findings and Recommendations - The related parties reimbursed Cheney Care Community for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors. S3800-130 Response Indicator – Agree S3800-140 Completion Date – November 20, 2025 S3800-150 Response – The related parties reimbursed Cheney Care Community for the expenditures paid on their behalf. Since the new accounts payable clerk started in the Summer of 2025, they have been reviewing all of the supporting documentation for disbursements made during the period of turnover, and accumulating any additional corrections that need to be made. They will continue this process for all disbursements from the period of turnover. The Executive Director/Administrator and Accountant will review the process and procedures in place with the new accounts payable clerk, and implement controls to ensure the appropriate facility and general ledger account coding are made going forward. In addition, they will review the review and monitoring controls in place and revise as needed to ensure the proper checks are in place to catch errors.