FAC Explorer

Finding 42881 (2022-003)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 48518
Organization: St. Luke's Hospital (ND)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Hospital lacks a robust internal control system for preparing the Schedule of Expenditures of Federal Awards, leading to potential inaccuracies.
  • Impacted Requirements: Compliance with financial reporting standards is compromised, as the Hospital relies on external auditors for preparation.
  • Recommended Follow-Up: Management should enhance awareness of financial reporting requirements and strengthen internal controls to ensure accurate Schedule preparation.

Finding Text

2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses in Internal Control Over Compliance ? Other Criteria - Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition - The Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital requested Eide Bailly LLP to draft the Schedule. Cause - Auditor assistance with preparation of the Schedule is not unusual as the Schedule has unique and specialized requirements and preparation is only required when the Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital would not be able to draft the Schedule and the accompanying notes to the Schedule that is correct without the assistance of the auditors. Questioned Costs - None reported Context/Sampling - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the internal controls that impact financial reporting. Views of Responsible Officials - Management agrees with the finding.

Corrective Action Plan

Finding 2022-003 Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants Federal Assistance Listing #10.766 Federal Agency Name: Department of Health and Human Services Program Names: COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution; COVID-19 Coronavirus State Hospital Improvement Program Federal Assistance Listings #93.498 & 93.301 Finding Summary: Eide Bailly assisted in the preparation of our draft schedule of expenditures and federal awards and accompanying notes to the consolidated schedule of expenditures and federal awards. Responsible Individuals: Jody Nelson, CEO and Megan Peterson, CFO Corrective Action Plan: It is not cost effective to have an internal control system designed to provide for a complete and accurate schedule of expenditures and federal awards. We requested that our auditors, Eide Bailly LLP, assist in the preparation of the schedule of expenditures. We have designated a member of management to review the drafted schedule of expenditures. Anticipated Completion Date: Ongoing

Categories

Reporting Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 42882 2022-003
    Material Weakness Repeat
  • 42883 2022-003
    Material Weakness Repeat
  • 42884 2022-004
    Significant Deficiency
  • 42885 2022-003
    Material Weakness Repeat
  • 42886 2022-004
    Significant Deficiency
  • 619323 2022-003
    Material Weakness Repeat
  • 619324 2022-003
    Material Weakness Repeat
  • 619325 2022-003
    Material Weakness Repeat
  • 619326 2022-004
    Significant Deficiency
  • 619327 2022-003
    Material Weakness Repeat
  • 619328 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $384,561
93.498 Provider Relief Fund $167,581
93.301 Small Rural Hospital Improvement Grant Program $159,981