Finding 499485 (2023-001)

Significant Deficiency Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-30

Audit: 322313

Organization: Huerfano County Hospital Dist. D/b/a Spanish Peaks Regional Health Cen (CO)

Auditor: Stockman Kast Ryan + CO LLP

AI Summary

Core Issue: Financial statements were not prepared correctly, leading to significant adjustments in expenses and revenues.
Impacted Requirements: Management must follow generally accepted accounting principles for accurate financial reporting.
Recommended Follow-Up: Ensure timely reconciliations of financial statements and adjust internal reports as needed.

Finding Text

Criteria or Specific Requirement – Management is responsible for preparing the financial statements in accordance with generally accepted accounting principles. Condition – Significant adjusting entries were made to accrued expenses, estimated third‐party payer settlements and related employee benefits expenses and patient service revenues. Context – Estimated self‐funded health plan claims liability and settlement activity related to estimated third‐party payer settlements were not properly recorded. Cause – Estimated self‐funded health plan claims liability and prior year third-party payer settlements are not reconciled and reviewed regularly due to limited personnel. Effect or Potential Effect – The District’s internal financial statements were misstated. Recommendation – We recommend the District ensure that reconciliations to the financial statements are performed timely and the internal financial statements be adjusted accordingly. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement the recommendation.

Corrective Action Plan

Condition - Significant adjusting entries were made to accrued expenses, estimated third-party payer settlements and related employee benefits expenses and patient service revenues. Recommendation - We recommend the District ensure that reconciliations to the financial statements are performed timely and the internal financial statements be adjusted accordingly. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and will implement the recommendation. Anticipated Date of Completion - In progress. Action Taken -We have reviewed the recommendations and will be discussing potential control improvements in the near future. Person Responsible for Corrective Action Plan - Colette Martin, Chief Financial Officer.

Other Findings in this Audit

499486 2023-002

Significant Deficiency Repeat
499487 2023-003

Significant Deficiency
1075927 2023-001

Significant Deficiency Repeat
1075928 2023-002

Significant Deficiency Repeat
1075929 2023-003

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
97.036	Disaster Grants - Public Assistance (presidentially Declared Disasters)	$837,578
93.155	Rural Health Research Centers	$224,675