Finding 58827 (2022-005)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-10-01

AI Summary

  • Core Issue: The Hospital failed to establish a required Reserve Account and make necessary deposits, leading to noncompliance with loan agreement terms.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) regarding effective internal control over federal awards.
  • Recommended Follow-Up: Develop policies and procedures to ensure adherence to all compliance requirements in federal contracts.

Finding Text

U.S. Department of Agriculture Federal Financial Assistance Listing #10.766, Community Facilities Loan Community Facilities Loans and Grants Cluster Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: 2 CFR 200.303(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 statutes, regulations, and conditions of the federal award. Condition: The Hospital was required to establish a Reserve Account with monthly deposits of $620 until a total balance of $74,342 was obtained. The Hospital did not establish this account or make any required deposits during 2022. Cause: This deficiency is due to a misunderstanding of establishing a Reserve Account. Effect: The Hospital was not in compliance with the terms of the loan agreement related to the Reserve Fund. Questioned Costs: None. Context: No sampling was utilized Repeat Finding from Prior Years: No Recommendation: We understand the Hospital paid off the loan subsequent to year-end, thus removing this requirement. We recommend the Hospital develop policies and procedures to ensure all compliance requirements included in federal contracts are being complied with. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Finding 2022-005 Federal Agency Name: U.S. Department of Agriculture Program Name: Community Facilities Loans and Grants Cluster CFDA # 10.766 Finding Summary: The Hospital was required to establish a Reserve Account with monthly deposits of $620 until a total balance of $74,342 was obtained. The Hospital did not establish this account or make any required deposits during 2022. This caused the Hospital to not be in compliance with the terms of the loan agreement related to the Reserve Fund. Responsible Individuals: Ashley Jaramillo, Chief Financial Officer Corrective Action Plan: Loan was subsequent paid in full and requirements of a Reserve Account are no longer needed. Anticipated Completion Date: September 29, 2023

Categories

Special Tests & Provisions Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 58826 2022-003
    Significant Deficiency Repeat
  • 58828 2022-003
    Significant Deficiency Repeat
  • 58829 2022-004
    Material Weakness
  • 58830 2022-006
    Significant Deficiency
  • 635268 2022-003
    Significant Deficiency Repeat
  • 635269 2022-005
    Significant Deficiency
  • 635270 2022-003
    Significant Deficiency Repeat
  • 635271 2022-004
    Material Weakness
  • 635272 2022-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $680,500
10.766 Community Facilities Loans and Grants $407,215
93.301 Small Rural Hospital Improvement Grant Program $284,442