FAC Explorer

Finding 624651 (2022-006)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-26
Audit: 46933
Organization: Winner Regional Healthcare Center (SD)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There is a material weakness in internal controls over the reserve fund account, as the Center did not have a formal review process for fund transfers and account reconciliations.
  • Impacted Requirements: The Center failed to comply with the Loan Resolution Security Agreement, which mandates a monthly reserve fund balance check.
  • Recommended Follow-Up: Management should establish procedures for monitoring federal expenditures, including a secondary review of fund transfers and monthly reconciliations.

Finding Text

2022-006 Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: The Center must establish and maintain effective internal control over the reserve fund account that is maintained in accordance with the loan resolution. The Loan Resolution Security Agreement requires a monthly amount to be set aside in a reserve fund until the specified account balance is reached. Condition: The Center elected to make a withdrawal and subsequent replenishment on the reserve account balance. There was no documented secondary review of the monthly reserve fund account reconciliations as compared to the required minimum balance. Cause: The Center did not have a formal review or approval process related to the transfer of funds to and from the operating account and reserve account or a process in place to compare the required balance per the Loan Resolution Security Agreement to the monthly reserve fund account balance. Effect: The lack of formal review or approval increases the risk of employees participating in the federal award administration not detecting and correcting noncompliance in a timely manner. Questioned Costs: None reported. The required reserve balance was appropriately funded as of December 31, 2022. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement procedures to include monitoring over special test and provisions related to federal expenditures including a secondary review of transfers to and from the reserve bank account and the monthly account reconciliation. Views of Responsible Officials: Management agrees with the finding.

Categories

Special Tests & Provisions Subrecipient Monitoring Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 48209 2022-006
    Material Weakness
  • 48210 2022-007
    Significant Deficiency
  • 48211 2022-006
    Material Weakness
  • 48212 2022-007
    Significant Deficiency
  • 48213 2022-005
    Material Weakness Repeat
  • 624652 2022-007
    Significant Deficiency
  • 624653 2022-006
    Material Weakness
  • 624654 2022-007
    Significant Deficiency
  • 624655 2022-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $898,278
10.766 Community Facilities Loans and Grants $148,365
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $37,256
93.301 Small Rural Hospital Improvement Grant Program $12,836
93.461 Covid-19 Testing for the Uninsured $10,377
93.800 Organized Approaches to Increase Colorectal Cancer Screening $3,099
93.994 Maternal and Child Health Services Block Grant to the States $2,145