Finding 501925 (2022-007)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2024-10-07

Audit: 324085

Organization: Hill & Dales General Hospital and Subsidiary (MI)

Auditor: Eide Bailly LLP

AI Summary

Core Issue: The Corporation lacks a robust internal control system for preparing the Schedule of Expenditures of Federal Awards, relying on auditor assistance.
Impacted Requirements: Proper financial reporting controls are necessary to ensure the accuracy of the Schedule and its notes.
Recommended Follow-Up: Management should enhance awareness of financial reporting requirements and strengthen internal controls related to the Schedule preparation.

Finding Text

Department of Agriculture Federal Assistance Listing #10.766 Community Facilities Loans and Grants Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance – Other (Repeat of 2022-006 due to requirement of the Federal Audit Clearinghouse) 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 Corporation does not have an internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards being audited. The Corporation 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 Corporation meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Corporation 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 was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management be aware of the financial reporting requirements relating to the Corporation’s schedule of expenditures of federal awards and the internal controls that impact financial reporting. View of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-007 Federal Agency Names: Department of Health and Human Services and Department of Agriculture Program Names: COVID-19 Provider Relief Fund and American Rescue Plan and Community Facilities Loans and Grants Federal Financial Assistance Listings: #93.498 and #10.766 Initial Fiscal Year Finding Occurred: 2022 Finding Summary: The Corporation does not have the internal control system designed to provide for a complete and accurate schedule of expenditures of federal awards (Schedule) being audited. The Corporation requested Eide Bailly LLP to draft the Schedule. Responsible Individuals: Renee Henry, Corporate Controller Corrective Action Plan: It is not cost effective to have an internal control system designed to provide for the preparation of the Schedule. We will continue to have our auditors prepare the Schedule as part of their single audit. Anticipated Completion Date: Ongoing

Other Findings in this Audit

501921 2022-003

Material Weakness Repeat
501922 2022-004

Material Weakness Repeat
501923 2022-005

Material Weakness Repeat
501924 2022-006

Material Weakness
1078363 2022-003

Material Weakness Repeat
1078364 2022-004

Material Weakness Repeat
1078365 2022-005

Material Weakness Repeat
1078366 2022-006

Material Weakness
1078367 2022-007

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
10.766	Community Facilities Loans and Grants	$15.53M
93.498	Provider Relief Fund and American Rescue Plan (arp) Rural Distribution	$2.07M
32.006	Covid-19 Telehealth Program	$681,800
93.U01	Rhc Testing Program	$527,483
21.027	Coronavirus State and Local Fiscal Recovery Funds	$500,000
93.912	Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement	$282,956
93.301	Small Rural Hospital Improvement Grant Program	$257,853