Finding 392137 (2023-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2024-04-02

Audit: 302363

Organization: Mahnomen Area Assisted Living Center INC (MN)

Auditor: Cliftonlarsonallen LLP

AI Summary

Core Issue: The organization failed to submit required year-end reports to USDA within the 150-day deadline.
Impacted Requirements: Compliance with the loan Letter of Conditions, specifically the submission of Form RD 442-2 and RD 442-3 or an annual audit report.
Recommended Follow-Up: Management should regularly review the Letter of Conditions and loan agreements to ensure all requirements are met annually.

Finding Text

Federal Agency: U.S. Department of Agriculture (USDA) Federal Program Name: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Award Identification Number and Year: CF27087L136368-2013 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: Material Weakness in Internal Control and Compliance Criteria or specific requirement: The loan Letter of Conditions of requires that a year-end management report Form RD 442-2 and RD 442-3 or an annual audit report be submitted no later than 150 days after the end of the borrower’s fiscal year. Condition: Management did not send the RD 442-2 and 442-3 or audited financial statements to USDA within 150 days of year-end. Questioned costs: None Cause: The loan was issued under previous management and the requirements were not known by management. Effect: The Organization was not in compliance with the letter of conditions. Repeat finding: No Recommendation: The Organization should review the Letter of Conditions and loan agreement to ensure all requirements are being met on an annual basis. Views of responsible officials: Management will review policies and procedures to ensure compliance

Corrective Action Plan

Material Weakness in Internal Control and Compliance Recommendation: The Organization should review the Letter of Conditions and loan agreement to ensure all requirements are being met on an annual basis. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will review policies and procedures to ensure compliance is met going forward including providing required financial information the USDA. Name(s) of the contact person(s) responsible for corrective action: Lori Guenther, CFO Planned completion date for corrective action plan: Has been implemented.

Other Findings in this Audit

392138 2023-002

Material Weakness
392139 2023-003

Material Weakness
968579 2023-001

Material Weakness
968580 2023-002

Material Weakness
968581 2023-003

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
10.766	Community Facilities Loans and Grants	$2.02M