Finding 41952 (2022-001)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-28

AI Summary

  • Core Issue: The Medical Center failed to fully complete the annual reporting checklist required by the USDA for its loans.
  • Impacted Requirements: Key reporting elements, including fidelity bond coverage and records verification, were not addressed, violating loan agreement terms.
  • Recommended Follow-Up: Strengthen policies and procedures to ensure complete and accurate annual reporting to the USDA moving forward.

Finding Text

Identification: 10.766 United States Department of Agriculture (USDA), Community Facilities Loans and Grants Cluster; Noncompliance Finding/Significant Deficiency; Reporting Compliance Requirement Criteria: The USDA direct loan and guaranteed loan were entered into in 2010 for renovation of the Medical Center's healthcare facility. One direct loan and one guaranteed loan were received. Management is responsible for submitting an annual reporting checklist to the USDA throughout the duration of the loans. The annual reporting checklist contains reporting for income statement, projected budget/cash flow, balance sheet, reporting of balances in reserve accounts, certificates regarding insurance coverage, Association project information (CP Guide 28), and verification of records (CP Guide 42). Condition: While the Medical Center submitted the annual reporting checklist to the USDA, the Medical Center did not complete the annual reporting checklist in its entirety. The Medical Center did not report any fidelity bond coverage on CP Guide 28 nor did the Medical Center complete the verification of records on CP Guide 42 which indicates that the records verification be completed by a board member. Cause: The Medical Center did not have adequate procedures in place to ensure the annual reporting checklist was completed in its entirety. Effect: The Medical Center did not follow the terms and conditions per the USDA loan agreements pertaining to reporting requirements. Questioned Costs: None Perspective Information: We reviewed the annual reporting checklist noting that it was not completed in its entirety. Repeat Finding: Not applicable Recommendations: We recommend that policies and procedures over USDA reporting be strengthened to ensure that the annual reporting checklist is completed in its entirety. Views from Responsible Officials: We would note that we were unaware of the Fidelity bond requirement in the loan documents and that our USDA representative has never questioned us for the lack of reporting this information. We would also note that the Chief Financial Officer has taken the responsibility of reviewing and signing the CP Guide 42 Form as a representative of the Medical Center. We will communicate with our USDA representative for guidance on these two matters and make changes as required based on their guidance.

Corrective Action Plan

Reference Number 2022-001 Identification: 10.766 United States Department of Agriculture (USDA), Community Facilities Loans and Grants Cluster, Noncompliance Finding/Significant Deficiency, Reporting Compliance Requirement. Corrective Action Plan: The Medical Center will make improvements to its reporting process to include reporting its fidelity bond coverage. The Medical Center will also seek guidance from the USDA as to the fidelity bond coverage limits and who can complete the certification of records on behalf of the Medical Center. We will implement these items as directed by our USDA representative. Anticipated completion date: The Medical Center will implement these improvements immediately which will be effective for its next annual reporting checklist that is due 60 days after calendar year end. Dean Ohmart, CFO Phone: 660-747-2500 E-mail: dohmart@wmmc.com

Categories

Student Financial Aid Reporting Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 618394 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $34.53M
93.498 Provider Relief Fund $2.27M
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $121,982