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.