Knute NelsonNon-Profit

2021-002 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year - Period 1 TIN #411263433 Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance - Other Criteria - Proper controls over financial reporting include the ability to prepare the consolidated schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition - The Corporation does not have an internal control system designed to provide for a complete and accurate consolidated schedule of expenditures of federal awards being audited. We were requested 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 Corporation meets a specified threshold of federal expenditures. Effect - There is a reasonable possibility that the Corporation would not be able to draft a Schedule that is correct without assistance of the auditors. Questioned Costs - None reported. Context - Sampling was not used. Repeat Finding from Prior Years - No Recommendation - We recommend management be aware of the financial reporting requirements relating to the Corporation?s consolidated schedule of expenditures of federal awards and internal controls that impact financial reporting. Views of Responsible Officials - Management agrees with the finding.

2021-003 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Applicable Federal Award Number and Year - Period 1 TIN #411263433 Reporting Material Weakness in Internal Control Over Compliance 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 Corporation?s final expenditure listing identified as eligible and claimed under the Provider Relief Fund Program were not reviewed and approved by a separate individual outside of the preparer. In addition, there was also no evidence retained that the Corporation?s special reports submitted to the Department of Health and Human Services for Period 1 was reviewed and approved by a separate individual outside of the preparer. In addition, the Corporation allocated a lump sum amount that was covered by another grant but did not match to the exact timeframe. Cause - The Corporation did not have an adequate internal control policy in place to ensure review and approval of the expense listing and reporting was documented. In addition, the Corporation did not ensure that quarterly amounts reported were accurate. Effect - Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program and the report may not be accurately completed or expenses could be claimed under duplicate grant programs. Questioned Costs - None reported. Context - Detail level testing was performed over expenses for activities allowed and unallowable and allowable cost/cost principles. In addition, key line items were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years - No Recommendation - We recommend the Corporation implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials - Management agrees with the finding.