Randolph County Nursing Home

Section II - Financial Statement Findings 2022-001 Internal Control Criteria or specific requirement: Internal control is a process consisting of interrelated components- control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintain internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management's assertions embodied in the financial statements. Condition: Deficiencies in the internal control component of control activities adversely affected the entity's ability to initiate, authorize, record, process, and report financial data in accordance with the accrual basis of accounting such that there was a reasonable possibility that a material misstatement of the entity's financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses include the following: depositing, posting, and reconciliation procedures were performed by the same employee, without compensating controls. Context: An understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures were obtained. Effect: The entity's ability to initiate, authorize, record, process, and report transactions consistent with management's assertions embodied in the financial statements, as well as the ability to safeguard the entity's assets, was adversely affected by the identified weaknesses in the above internal control component. Cause: Entity management, due to cost/benefit implications, which hindered the entities ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Recommendation: Entity management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management's assertions embodied in the financial statements that will safeguard the entity's assets. Section III - Federal Award Findings and Questioned Costs No matters were reported.

Internal Control Criteria or specific requirement: Internal control is a process consisting of interrelated components- control environment, risk assessment, information and communication, control activities, and monitoring. Management is responsible for adopting sound accounting policies and for establishing and maintain internal control that will, among other things, initiate, authorize, record, process, and report transactions (as well as events and conditions) consistent with management's assertions embodied in the financial statements. Condition: Deficiencies in the internal control component of control activities adversely affected the entity's ability to initiate, authorize, record, process, and report financial data in accordance with the accrual basis of accounting such that there was a reasonable possibility that a material misstatement of the entity's financial statements would not be prevented, or detected and corrected on a timely basis. Financial accounting duties were not adequately segregated among employees. Specifically, certain key weaknesses include the following: depositing, posting, and reconciliation procedures were performed by the same employee, without compensating controls. Context: An understanding of the five components of internal control sufficient to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures were obtained. Effect: The entity's ability to initiate, authorize, record, process, and report transactions consistent with management's assertions embodied in the financial statements, as well as the ability to safeguard the entity's assets, was adversely affected by the identified weaknesses in the above internal control component. Cause: Entity management, due to cost/benefit implications, which hindered the entities ability to adequately segregate financial accounting duties among employees, did not effectively address the deficiencies in internal control. Recommendation: Entity management should adopt sound accounting policies and establish and maintain internal control that will initiate, authorize, record, process, and report transactions consistent with management's assertions embodied in the financial statements that will safeguard the entity's assets.

Internal Control

GSA_MIGRATION