Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 26, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 26, 2026 (129 days from today).
What is a management decision? →Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Special Tests and Provisions Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: The loan agreement and related federal award terms require the auditee to maintain a minimum debt service coverage ratio of 1.20:1, calculated annually based on audited financial statements. Management is responsible for designing and implementing internal controls to ensure compliance with all loan covenant requirements (2 CFR 200.303). Condition: The auditee did not maintain the required debt service coverage ratio for the year ended December 31, 2025. The calculated ratio was 0.66:1, which is below the required threshold. Additionally, the Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Cause: The Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Effect: Failure to maintain the required debt service coverage ratio resulted in noncompliance with the terms of the federal award. Without effective controls, there is an increased risk that noncompliance with loan covenants may not be prevented or detected in a timely manner. Questioned Costs: None reported Context/Sampling: The auditor recalculated the debt service coverage ratio using audited financial data for the year ended December 31, 2025 and compared the result to the covenant requirement. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management implement formal controls to monitor compliance with debt covenants, including periodic calculation of the debt service coverage ratio, documentation of management review and approval, and timely communication with the lender if noncompliance is identified. Views of Responsible Officials: Management agrees with the finding.
Special Tests and Provisions Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance Department of Agriculture Federal Financial Assistance Listing #10.766 Community Facilities Loans and Grants Finding Summary: The Hospital did not maintain the required debt service coverage ratio for the year ended December 31, 2025. Additionally, the Hospital does not have a control process in place to ensure that the monitored debt service coverage ratio is accurate and non-compliance is reported timely. Responsible Individuals: Eric J. Price, CFO Corrective Action Plan: Management has enhanced internal control policies and processes to monitor compliance with debt covenants, including the periodic calculation of debt service coverage ratio, documentation of management review and approval, and timely communication with the lender if noncompliance is identified. Anticipated Completion Date: September 30, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 30, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 30, 2025, which was (232 days ago).
What is a management decision? →Department of Treasury Federal Assistance Listing #21.027 Coronavirus State and Loan Fiscal Recovery Funds Reporting Significant Deficiency 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 - During our testing, we noted a lack of documentation of a secondary review on the expense reports that were required to be submitted. Cause - The Organization did not have an adequate internal control policy in place to ensure that a secondary review and approval of the reports was taking place. Effect - The lack of adequate policies governing review and approval increase the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs - None. Context - A selection of three expense reports out of total population of six were tested. Documentation of a secondary review was missing from the three reports tested. Repeat Finding from Prior Years - No Recommendation - We recommend that the Organization enhance internal control policies to ensure that a secondary review of expense report is taking place prior to submission and that those reviews are formally documented. Views of Responsible Officials - Management agrees with the finding.
Reporting Significant Deficiency in Internal Control over Compliance Department of Treasury Federal Assistance Listing #21.027 Coronavirus State and Loan Fiscal Recovery Funds Finding Summary: Lack of documentation of a secondary review on expense reports required to be submitted. Responsible Individuals: Eric Price, CFO Corrective Action Plan: Management has enhanced internal control policies and processes to ensure that a secondary review of expense report is taking place prior to submission and that those reviews are formally documented. Anticipated Completion Date: Ongoing
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 16, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 16, 2023, which was (1068 days ago).
What is a management decision? →2021-003 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #742517055 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency 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 Hospital?s final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund Program, and special report submitted to the Department of Health and Human Services for Period 1 did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Cause: The Hospital did not have an adequate internal control policy in place to ensure review and approval over the final expenditure listing, the lost revenue calculation, or preparation of HHS Period 1 reporting were documented. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: Key line items were tested on the Period 1 Department of Health and Human Services special report and the supporting COVID-19 related expense tracker and lost revenue documents. Repeat Finding from Prior Years: No Recommendation: We recommend the Hospital implement a control process which includes a secondary review and documented approval of the summarized final expenditure listing used to claim the allowable costs and lost revenue calculation under the federal program. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #742517055 Federal Assistance Listing/CFDA #93.498 Finding Summary: The Hospital?s final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund Program, and special report submitted to the Department of Health and Human Services for Period 1 did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Responsible Individuals: Eric Price, CFO Corrective Action Plan: When summarizing eligible costs and lost revenue for submission, a secondary review of the summary spreadsheet prepared from the underlying supporting expense records will be documented. Before reports are submitted to the federal agency, documented approval of this submission will be acquired. A policy will be drafted requiring such documentation of review and approval. Anticipated Completion Date: April 2023
2021-004 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #742517055 Activities Allowed or Unallowed, Allowable Costs/Costs Principles and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance for Reporting 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. The Hospital claimed expenses based on specifically identified COVID related expenses. Condition: The Hospital claimed expense that were reimbursed by other funding sources. These expenses were improperly included within the HHS Special Report (Special Report) which caused the Special Report to be inaccurate. Cause: The Hospital submitted expenses that were to be reimbursed by other funding sources (i.e., Medicare). The Hospital did not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs were documented and to ensure that expenses claimed in the Special Report were complete and accurate. Effect: The lack of adequate policies governing preparation and submission of the Special Report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Hospital submitted expenses over their actual allowable expenses. Without a secondary review and approval, the Special Report submitted was not accurately completed. Questioned Costs: There are no questioned costs as there is enough excess lost revenue to cover the differences. Context: A nonstatistical sample of 65 expenditures was selected for testing, which accounted for $20,401 of $1,228,379 of direct program expenditures. Repeat Finding from Prior Years: No Recommendation: We recommend that the Hospital enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Special Report required to be submitted to the federal agency. We also recommend the Hospital enhance internal control policies to ensure that the required reports are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the Special Reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-004 Activities Allowed or Unallowed, Allowable Costs/Costs Principles and Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance for Reporting Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 1 TIN #742517055 Federal Assistance Listing/CFDA #93.498 Finding Summary: The Hospital claimed expense that were reimbursed by other funding sources. These expenses were improperly included within the HHS Special Report which caused the Report to be inaccurate. Responsible Individuals: Eric Price, CFO. Corrective Action Plan: Management will enhance internal controls to ensure that disbursements are reviewed, approved, supported, allowed, properly recorded, and reimbursed only by the program. A policy will be drafted requiring such documentation, review and approval. Anticipated Completion Date: April 2023
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on January 23, 2022. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by July 23, 2022, which was (1488 days ago).
What is a management decision? →Compliance Requirement- Reporting Type of Finding- Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The Hospital is required to maintain a Form 402-2, "Statement of Deposits and Withdrawals," or a similar system approved by Rural Development. All deposits and withdraws to the construction account are to be recorded on this form and submitted monthly to Rural Development. Condition: During testing performed, it was determined that the Hospital did not submit required monthly construction detail of deposits and withdrawals, including amounts earned as interest on funds held, that complies with the Letter of Conditions effective for the year ended December 31, 2020. Cause: The Hospital was not aware of the requirements for reporting such information. Effect: Inadequate controls over this area of compliance result in timely reports not being submitted to Rural Development. Questioned Costs: None. Context/Sampling: Sampling was not utilized. Through inquiry it was noted that ten of ten reports were not being submitted. Repeat Finding from Prior Year: Yes Recommendation: We recommend the Hospital create an internal process for tracking deposits and withdrawals, as well as submitting the detail to Rural Development on a monthly basis and submitting the audit within the required timeline. Views of Responsible Officials: Management agrees with the finding.
Finding 2020-004 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance US Department of Agriculture Community Facilities Loans and Grants CFDA #10.766 Finding Summary: The Hospital is required to maintain a Form 402-2, "Statement of Deposits and Withdrawals," or a similar system approved by Rural Development. All deposits and withdraws to the construction account are to be recorded on this form and submitted monthly to Rural Development. Responsible Individuals: Boyd Chappell, CFO Corrective Action Plan: The Hospital will work to put into place proper processes and reviews in order to submit the required reporting requirements to the USDA in a timely manner. Anticipated Completion Date: December 2021
2019-003
Compliance Requirement- Special Tests and Provisions Type of Finding- Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Rural Development will review and approve all bills prior to their payment by the Hospital. Condition: During testing performed, it was determined that the Hospital did not receive Rural Development approval prior to payment that complies with the Letter of Conditions effective for the year ended December 31, 2020. Cause: The Hospital was not aware of the requirement of obtaining Rural Development approval prior to payment. Effect: Inadequate controls over this area resulted in non-compliance with the Letter of Conditions. Questioned Costs: None. Context/Sampling: All invoices were subject to testing. One invoice representing expenditures of $1,300,780 out of a population of one were selected for testing. This invoice was not approved by Rural Development prior to payment. Repeat Finding from Prior Year: Yes Recommendation: We recommend the Hospital create a review and approval process both internally and with Rural Development to obtain all required approvals prior to bill payment. Views of Responsible Officials: Management agrees with the finding.
Finding 2020-005 Special Tests and Provisions Material Weakness in Internal Control over Compliance and Material Noncompliance Finding Summary: The Hospital did not receive Rural Development approval prior to payment that complies with the Letter of Conditions effective for the year ended December 31, 2020. Responsible Individuals: Boyd Chappell, CFO Corrective Action Plan: The Hospital will work to put into place proper processes and controls to comply with the Letter of Conditions so proper approvals are obtained from Rural Development prior to when expenditures are made. Anticipated Completion Date: December 2021
2019-004
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on December 29, 2020. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by June 29, 2021, which was (1877 days ago).
What is a management decision? →Compliance Requirement- Reporting Type of Finding- Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The Hospital is required to maintain a Form 402-2, "Statement of Deposits and Withdrawals," or a similar system approved by Rural Development. All deposits and withdraws to the construction account are to be recorded on this form and submitted monthly to Rural Development. Condition: During testing performed, it was determined that the Hospital did not submit required monthly construction detail of deposits and withdrawals, including amounts earned as interest on funds held, that complies with the Letter of Conditions effective for the year ended December 31, 2019. An annual audit must be prepared by an independent licensed Certified Public Accountant, or a State or Federal auditor if allowed by State law and must be submitted within six months of fiscal year end to Rural Development. Questioned Costs: None. Context/Sampling: Sampling was not utilized. Through inquiry it was noted that four of four reports were not being submitted. The annual audit was not submitted to Rural Development within six months of fiscal year end. Cause: The Hospital was not aware of the requirements for reporting such information. Effect: Inadequate controls over this area of compliance result in timely reports not being submitted to Rural Development. Repeat Finding from Prior Year: No Recommendation: We recommend the Hospital create an internal process for tracking deposits and withdrawals, as well as submitting the detail to Rural Development on a monthly basis and submitting the audit within the required timeline. Views of Responsible Officials: Management agrees with the finding.
Finding 2019-003 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance US Department of Agriculture Community Facilities Loans and Grants CFDA #10.766 Finding Summary: The Hospital is required to maintain a Form 402-2, "Statement of Deposits and Withdrawals," or a similar system approved by Rural Development. All deposits and withdraws to the construction account are to be recorded on this form and submitted monthly to Rural Development. An annual audit must be prepared by an independent licensed Certified Public Accountant, or a State or Federal auditor if allowed by State law and must be submitted within 6 months of fiscal year end to Rural Development. Responsible Individuals: Boyd Chappell, CFO Corrective Action Plan: The Hospital will work to put into place proper processes and reviews in order to submit the required reporting requirements to the USDA in a timely manner.
Compliance Requirement- Special Tests and Provisions Type of Finding- Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Rural Development will review and approve all bills prior to their payment by the Hospital. Condition: During testing performed, it was determined that the Hospital did not receive Rural Development approval prior to payment that complies with the Letter of Conditions effective for the year ended December 31, 2019. Questioned Costs: None. Context/Sampling: All invoices were subject to testing. Six invoices representing expenditures of $600,647 out of a population of twenty-one were selected for testing. Cause: The Hospital was not aware of the requirement of obtaining Rural Development approval prior to payment. Effect: Inadequate controls over this area of results in a reasonable possibility of non-compliance with the Letter of Conditions. Repeat Finding from Prior Year: No Recommendation: We recommend the Hospital create a review and approval process both internally and with Rural Development to obtain all required approvals prior to bill payment. Views of Responsible Officials: Management agrees with the finding.
Finding 2019-004 Special Tests and Provisions Material Weakness in Internal Control over Compliance and Material Noncompliance Finding Summary: The Hospital did not receive Rural Development approval prior to payment that complies with the Letter of Conditions effective for the year ended December 31, 2019. Responsible Individuals: Boyd Chappell, CFO Corrective Action Plan: The Hospital will work to put into place proper processes and controls to comply with the Letter of Conditions so proper approvals are obtained from Rural Development prior to when expenditures are made. Anticipated Completion Date: June 2021
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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