Finding 500274 (2023-005)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-30

Audit: 323053

Organization: St. Vincent General Hospital District (CO)

Auditor: Wipfli LLP

AI Summary

Core Issue: The Hospital failed to submit the required annual debt service reserve calculation to the USDA, leading to noncompliance.
Impacted Requirements: This finding highlights a lack of policies and procedures for reporting, which is critical for compliance with federal funding terms.
Recommended Follow-Up: Management should establish clear reporting policies and ensure timely submission of all required financial documents to avoid future issues.

Finding Text

Finding: 2023-005 Reporting requirements Program Name Title: Community Facilities Loans and Grants Federal Assistance Listing Number: 10.766 Federal Agency: U.S. Department of Agriculture Type of Finding: Noncompliance, Material weakness Compliance Requirement: Reporting Repeat Finding: Yes Questioned Cost: None Criteria: Under the terms and conditions of the award, the recipient certifies it will provide quarterly financial information, the annual budget, annual financial statements, annual Medicare cost report, and annual debt service reserve calculation to the USDA and the interim financing lender. Condition: The Hospital did not send the annual debt service reserve calculation to the USDA. Cause: The Hospital did not have policies or procedures in place surrounding the required reporting. The Hospital also had turnover in management and has been navigating through a financial crisis. Effect: The Hospital was out of compliance with the terms and conditions of the award during 2023. Recommendation: We recommend management implement policies and procedures surrounding the reporting required under the USDA loan program as well as provide the required reports on a timely basis to all respective parties. View of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

This was rectified mid-way through the 2023 year, when all covenants were reviewed with the USDA and Colliers Mortgage team. As a result, these reports have now been sent timely to USDA starting at the end of 2023 and have continued since then. The annual debt reserve calculation has not been provided as that was not brought to the hospital’s direct attention during our bi-weekly USDA meetings. However, going forward these will be added.

Other Findings in this Audit

500275 2023-006

Material Weakness Repeat
500276 2023-007

Significant Deficiency Repeat
1076716 2023-005

Material Weakness Repeat
1076717 2023-006

Material Weakness Repeat
1076718 2023-007

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.766	Community Facilities Loans and Grants	$20.93M
93.155	Rural Health Research Centers	$49,826