Finding Text
Repeat Finding: Yes
Program Name: Community Facilities Loans and Grants
Assistance Listing Number: 10.766
Federal Agency: U.S. Department of Agriculture
Questioned Costs: N/A
Type of Finding: Noncompliance, Significant Deficiency
Compliance Requirement: Special Tests and Provisions
Condition: The District did not meet its financial covenants required under the program during the year, and we, as the auditors, were unable to properly calculate the required financial covenants because of potential missing or misstated financial statement information
due to the adverse opinion on the 2022 financial statements and related disclaimer of opinion included in our accompanying 2023 Independent Auditor's Report.
Criteria The District is required to meet certain financial covenants as described in Article VIII of the Hospital Revenue Bonds Series A loan documents dated October 25, 2012.
Cause: The District has had significant financial challenges and turnover within its finance department.
Effect: The District was not in compliance with the program.
Recommendation: We recommend that management put a plan in place to become compliant with the financial covenants of the debt.
Review of Responsible Officials: Managemet acknowledges they were not in compliance with the financial covenants of the bond. Management has been in contact USDA to keep them informed on the situation and has put plans into place to improve the financial position of the District.