Finding 61226 (2022-005)

Identification of the Federal Program: U.S. Department of Agriculture ? Community Facilities Loans and Grants Cluster, Community Facilities Loans and Grants ? 10.766 Criteria: The Partnership must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Partnership is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with program requirements. Terms and conditions of the federal award require the Hospital to maintain a debt service reserve fund as bookkeeping accounts or as separate bank accounts. Condition: During 2022, the certificate of deposit that represented the debt service reserve fund matured and the proceeds were commingled with an existing money market fund. Cause: The Partnership did not maintain a separate bank account for the debt service reserve fund. Effect: The debt service reserve funds were commingled with other operating funds within a money market fund. Questioned Costs: None reported. Context: Sampling was not used. Recommendation: We recommend that management maintain a separated bank account for the debt service reserve fund. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.