Finding Text
United States Department of Agriculture CFDA 10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: There was no evidence retained that the Hospital?s recalculates debt covenants as required or performs any review of one of the two financial debt covenant calculations. Cause: The Hospital did not have an internal control process in place to ensure recalculation and review of all required covenants. Effect: The Hospital may not identify when noncompliance with debt covenants occurs. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement a control process which includes periodic calculation and review of all financial debt covenants. Views of Responsible Officials: Management agrees with the finding.