Finding 410367 (2022-002)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2022-12-26

Audit: 311960

Organization: Jenkins Living Center, Inc. (SD)

Auditor: Eide Bailly LLP

AI Summary

Core Issue: The Center lacks a proper internal control system for preparing the Schedule of Expenditures of Federal Awards.
Impacted Requirements: Compliance with financial reporting standards is compromised, as the Center may struggle to prepare the schedule accurately without auditor assistance.
Recommended Follow-Up: Management should enhance awareness of financial reporting requirements and improve internal controls related to the schedule preparation.

Finding Text

2022-002 Department of Health and Human ServicesFederal Financial Assistance Listing/CFDA #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 and Period 2 TIN#460242831Preparation of Schedule of Expenditures of Federal AwardsMaterial Weakness in Internal Control Over ComplianceCriteria: Proper controls over financial reporting include the ability to prepare the combined schedule of expenditures of federal awards (the schedule) and accompanying notes to the schedule.Condition: The Center does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule.Cause: Auditor assistance with the preparation of the schedule is not unusual as the schedule has unique and specialized requirements and preparation is only required when the Center meets a specified threshold of federal expenditures.Effect: There is a reasonable possibility that the Center would not be able to draft the schedule that is correct without the assistance of the auditors.Questioned Costs: None reported.Context: Sampling was not used.Repeat Finding from Prior Years: NoRecommendation: While we recognized that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Center?s schedule and the internal controls that impact financial reporting.Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-002Federal Agency Name: Department of Health and Human ServicesProgram Name: COVID 19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionFederal Financial Assistance Listing #93.498Compliance Requirement: Preparation of Schedule of Expenditures of Federal AwardsMaterial Weakness in Internal Control Over ComplianceFinding Summary: We do not have an internal control system designed to provide for the preparation of the schedule and have requested the assistance of our auditors Eide Bailly, LLP.Responsible Individuals: Loren Diekman, Interim President/CEOCorrective Action Plan: It is not cost effective to have an internal control system designed to provide for the preparation of the schedule and accompanying notes. We requested that our auditors, Eide Bailly LLP, prepare the schedule and the accompanying notes to schedule as a part of their audit. We have designated a member of management to review the drafted schedule and accompanying notes, and we have reviewed with and agree with the schedule.Anticipated Completion Date: Ongoing

Other Findings in this Audit

410368 2022-003

Material Weakness
410369 2022-004

Significant Deficiency
410370 2022-003

Material Weakness
986809 2022-002

Material Weakness
986810 2022-003

Material Weakness
986811 2022-004

Significant Deficiency
986812 2022-003

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
93.498	Provider Relief Fund	$1.13M