Core Issue: The Hospital lacks a robust internal control system for preparing the Schedule of Expenditures of Federal Awards, leading to potential inaccuracies.
Impacted Requirements: Compliance with financial reporting standards is compromised, as the Hospital relies on external auditors for preparation.
Recommended Follow-Up: Management should enhance awareness of financial reporting requirements and strengthen internal controls to ensure accurate Schedule preparation.
Finding Text
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Cluster Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Department of Health and Human Services Federal Financial Assistance Listing #93.301 COVID-19 Coronavirus State Hospital Improvement Program Preparation of Schedule of Expenditures of Federal Awards Material Weaknesses in Internal Control Over Compliance ? Other 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 Hospital does not have an internal control system designed to provide for a complete and accurate Schedule being audited. The Hospital 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 Hospital meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Hospital 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 - Sampling was not used. Repeat Finding from Prior Years - Yes Recommendation - We recommend management be aware of the financial reporting requirements relating to the Hospital?s Schedule and the internal controls that impact financial reporting. Views of Responsible Officials - Management agrees with the finding.
Categories
ReportingMaterial WeaknessMatching / Level of Effort / Earmarking