Finding Text
Finding 2025-002: Significant Deficiency in Internal Control Over Compliance - Reporting Federal Program: Mortgage Insurance - Hospitals Assistance Listing Number: 14.128 Award Number: N/A Award Year: 2025 Compliance Requirement: Reporting Questioned Costs: There are no questioned costs associated with this finding. Criteria: The Corporation should maintain effective internal controls to identify and ensure compliance with all reporting requirements in a timely manner. Condition: The Corporation was required to submit their annual audited financial statements for the fiscal year ended December 31, 2024 by April 30, 2025, which were submitted on May 27, 2025. The Corporation was also required to submit their annual budget for fiscal year 2025 by January 30, 2025, which was submitted on June 16, 2025. Cause: The Corporation did not have adequate internal controls in place to monitor reporting requirements and ensure required submissions were completed by the deadlines established in the Regulatory Agreement. Effect: The Corporation did not comply with the reporting requirements related to the timely submission of its annual audited financial statements for the fiscal year ended December 31, 2024, or its fiscal year 2025 annual budget. Although the funding agency notified the Corporation in July 2025 that no action would be taken regarding the late submissions, the untimely filings demonstrate that controls were not operating effectively to ensure compliance with the reporting requirements. Recommendation: We recommend that the Corporation strengthen its internal controls by implementing procedures to identify all reporting requirements, monitor applicable deadlines, and ensure required reports are submitted in a timely manner in accordance with the Regulatory Agreement. Planned Corrective Actions and View of Responsible Officials: Management agrees with the finding. The Corporation experienced turnover in key personnel who were responsible for adherence to the requirements of the Regulatory Agreement, thus resulting in late submission of the annual audited financial statements and the annual budget by the required deadlines. Management has implemented additional levels of oversight and assigned appropriate personnel to oversee adherence to the requirements of the Regulatory Agreement. This finding has been remediated in 2026 through the timely filings of the annual audited consolidated financial statements for the year ended December 31, 2025, and the 2026 annual budget.