Finding 588006 (2023-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-02-02
Audit: 15370
Organization: Eventide (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Organization has a material weakness in internal controls, leading to inaccurate reporting of resident revenues related to COVID-19 funding.
  • Impacted Requirements: Compliance with 2 CFR 200.33(a) is necessary for accurate reporting to HHS, which was not met due to calculation errors.
  • Recommended Follow-Up: Enhance internal controls by implementing a secondary review process for revenue calculations to ensure accuracy in HHS reports.

Finding Text

2023-002 Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 4 TIN #463364672, Period 4 TIN #410721640, Period 4 TIN #450275011, and Period 5 TIN #272608086 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Organization is required to submit an accurate report to HHS for each filing period that funds were received. Condition: The Organization claimed lost revenues attributable to coronavirus in which the resident revenue calculation did not agree to the HHS special report for two key line items. Cause: The Organization had a resident revenue calculation error of $269,085 on the HHS special report with no impact to the actual lost revenues (i.e. lost revenue claimed was accurate on the HHS special report but key line items were misstated). Effect: While the calculation error did not provide a difference in total between the lost revenues utilized on the HHS special report and the lost revenue calculation, the Organization’s reported quarterly resident revenues were inaccurate. This calculation error also indicated there is a lack of policies governing the review and approval of the lost revenue calculation to the HHS special report. Questioned Costs: None reported. Context: There were 66 lost revenue key line items tested on which two key line items contained errors which totaled $269,085 (resident revenue was understated for both quarters). The errors had no impact on the amount of lost revenue as the two quarters impacted did not result in any lost revenue. Repeat Finding from Prior Years: Yes, Finding 2022-003. Recommendation: We recommend that the Organization enhance internal control policies to ensure the HHS special report is supported by accurate revenue calculations. This would include implementing a secondary review and approval over the lost revenue calculation. Views of Responsible Officials: Management agrees with the finding.

Categories

Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 11563 2023-001
    Significant Deficiency Repeat
  • 11564 2023-002
    Material Weakness Repeat
  • 11565 2023-001
    Significant Deficiency Repeat
  • 588005 2023-001
    Significant Deficiency Repeat
  • 588007 2023-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $5.76M
93.498 Covid-19 Provider Relief Fund $870,377
14.157 Supportive Housing for the Elderly $136,761