FAC Explorer

Finding 48209 (2022-006)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-26
Audit: 46933
Organization: Winner Regional Healthcare Center (SD)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There is a material weakness in internal controls over the reserve fund account, as the Center did not have a formal review process for fund transfers and account reconciliations.
  • Impacted Requirements: The Center failed to comply with the Loan Resolution Security Agreement, which mandates a monthly reserve fund balance check.
  • Recommended Follow-Up: Management should establish procedures for monitoring federal expenditures, including a secondary review of fund transfers and monthly reconciliations.

Finding Text

2022-006 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: The Center must establish and maintain effective internal control over the reserve fund account that is maintained in accordance with the loan resolution. The Loan Resolution Security Agreement requires a monthly amount to be set aside in a reserve fund until the specified account balance is reached. Condition: The Center elected to make a withdrawal and subsequent replenishment on the reserve account balance. There was no documented secondary review of the monthly reserve fund account reconciliations as compared to the required minimum balance. Cause: The Center did not have a formal review or approval process related to the transfer of funds to and from the operating account and reserve account or a process in place to compare the required balance per the Loan Resolution Security Agreement to the monthly reserve fund account balance. Effect: The lack of formal review or approval increases the risk of employees participating in the federal award administration not detecting and correcting noncompliance in a timely manner. Questioned Costs: None reported. The required reserve balance was appropriately funded as of December 31, 2022. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement procedures to include monitoring over special test and provisions related to federal expenditures including a secondary review of transfers to and from the reserve bank account and the monthly account reconciliation. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-006 Federal Agency Name: Department of Agriculture Program Name: Community Facilities Loans and Grants FFAL #10.766 Finding Summary: We elected to make a withdrawal and subsequent replenishment on the reserve account. There was no documented secondary review of the monthly reserve fund account reconciliations as compared to the required minimum balance. Responsible Individuals: Amanda Soesbe, Chief Finance Officer Corrective Action Plan: An automatic transfer to fund the debt reserve account was established in January 2023 and repeats each month until the fund has been properly funded. Additionally the finance packets presented to the governing board will include monthly oversight of debt reserve balances and whether or not the facility is in compliance. Anticipated Completion Date: 9-30-2023

Categories

Special Tests & Provisions Subrecipient Monitoring Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 48210 2022-007
    Significant Deficiency
  • 48211 2022-006
    Material Weakness
  • 48212 2022-007
    Significant Deficiency
  • 48213 2022-005
    Material Weakness Repeat
  • 624651 2022-006
    Material Weakness
  • 624652 2022-007
    Significant Deficiency
  • 624653 2022-006
    Material Weakness
  • 624654 2022-007
    Significant Deficiency
  • 624655 2022-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $898,278
10.766 Community Facilities Loans and Grants $148,365
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $37,256
93.301 Small Rural Hospital Improvement Grant Program $12,836
93.461 Covid-19 Testing for the Uninsured $10,377
93.800 Organized Approaches to Increase Colorectal Cancer Screening $3,099
93.994 Maternal and Child Health Services Block Grant to the States $2,145