Finding 42914 (2022-002)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2022

Accepted

2022-12-22

Audit: 39421

Organization: Hegg Memorial Hospital D/b/a Hegg Health Center (IA)

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: This affects compliance with financial reporting standards, increasing the risk of inaccuracies in the schedule.
Recommended Follow-Up: Management should enhance internal controls to ensure accurate preparation of financial reports, acknowledging the staffing limitations.

Finding Text

2022-002 Department of Agriculture Federal Financial Assistance Listing/CFDA #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance - Other Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards and the accompanying notes to the schedule of expenditures of federal awards. Condition: The Center does not have an internal control system designed to provide for the preparation of the schedule of expenditures of federal awards. As auditors, we were requested to assist with the preparation of the schedule of expenditures of federal awards. Cause: Auditor assistance with preparation of the schedule of expenditures of federal awards is not unusual in an organization the size of the Center. Effect: There is a reasonable possibility that the Center would not be able to draft a complete and accurate schedule of expenditures of federal awards. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: Yes, 2021-002 Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that the Center is aware of this condition for financial reporting requirements relating to the Center?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-002 Department of Agriculture Federal Financial Assistance Listing/CFDA #10.766 Communities Facilities Loans and Grants Cluster Finding Summary: The Center does not have an internal control system designed to provide for the preparation of the schedule of expenditures of federal awards. As auditors, we were requested to assist with the preparation of the schedule of expenditures of federal awards. Responsible Individual: Bill Slater, Chief Financial Officer Corrective Action Plan: It is not cost effective to have an internal control system designed to prepare the schedule of expenditures of federal awards. We requested that our auditors, Eide Bailly LLP, to assist with the preparation of the schedule of expenditures of federal awards. We have designated a member of management to review the drafted schedule of expenditures of federal awards, and we have reviewed with and agree with the final schedule of expenditures of federal awards. Anticipated Completion Date: Ongoing

Other Findings in this Audit

42913 2022-003

Material Weakness
42915 2022-003

Material Weakness
42916 2022-002

Material Weakness Repeat
42917 2022-003

Material Weakness
42918 2022-002

Material Weakness Repeat
619355 2022-003

Material Weakness
619356 2022-002

Material Weakness Repeat
619357 2022-003

Material Weakness
619358 2022-002

Material Weakness Repeat
619359 2022-003

Material Weakness
619360 2022-002

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.766	Community Facilities Loans and Grants	$3.73M
93.498	Provider Relief Fund	$221,241
93.461	Covid-19 Testing for the Uninsured	$37,484
21.019	Coronavirus Relief Fund	$15,254