Finding 392138 (2023-002)

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 obtain required fidelity bond coverage for individuals handling loan funds.
Impacted Requirements: Compliance with the loan Letter of Conditions, specifically regarding fidelity bonds.
Recommended Follow-Up: Annually review the Letter of Conditions and loan agreements to ensure all requirements are met.

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 position fidelity bonds are carried on individuals entrusted with receipt and/or disbursements. Condition: Management did not obtain an insurance policy that carried the required fidelity bond coverage. 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 is met

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 and will obtain required insurance coverage as noted in the Letter of Conditions. Name(s) of the contact person(s) responsible for corrective action: Lori Guenther, CFO Planned completion date for corrective action plan: Q2 of 2023

Other Findings in this Audit

392137 2023-001

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