Finding Text
Criteria or Specific Requirement - 45 CFR § 75.512, Report Submission, requires completion of an audit and submission of the data collection form and reporting package within the earlier of thirty calendar days after receipt of the auditors’ report, or nine months after the end of the audit period.
Condition - The audit and data collection form are being submitted after the required due date.
Cause - The delay in filing required submissions timely was driven by slow communications from grantor in relation to the Organization missing certain debt covenants and providing corrective actions.
Effect - Noncompliance with the requirements of 45 CFR § 75.512. There is a potential for suspension or cessation of federal funding under the federal award.
Questioned Cost - To be determined by the grantor.
Context - We reviewed the audit submission date in comparison to the required due date.
Repeat Finding - No
Recommendation - The Organization should seek to identify potential issues earlier and begin discussions with the grantor as soon as possible to work together in finding a resolution.
View of Responsible Officials and Planned Corrective Actions - On June 28, 2023, prior to the expiration of the 180 day deadline after year-end for the issuance of the audit report, and prior to the nine month period for the issuance of the Single Audit report, representatives of CHR Consulting Services, Inc. held a conference call with representatives of the USDA informing them that the issuance of the audit report would be delayed due to open items for the audit addressing non-compliance with certain covenants, including the Debt Service Coverage Ratio. Centre Care requested waivers from the USDA on the covenant violations to avoid the classification of the USDA mortgage as current, resulting in the inclusion in the audit report of an Emphasis of matter paragraph for a Going Concern. Centre Care wished to avoid such an audit opinion as it has ongoing grant requests which would be adversely impacted by such an audit opinion.
It was eventually determined that the no waivers would be issued by the USDA to avoid the aforementioned audit opinion and the Board of Directors and Finance Committee determined to proceed with the issuance of the audit with the Emphasis of Matter as a Going Concern.
Centre Care is working with the external auditors for the completion and submission of the audit for the year ended December 31, 2022. Future audits will be issued and submitted within the appropriate deadlines.