THE MEMORIAL HOSPITAL

United States Department of Agriculture CFDA 10.766 Community Facilities Loans and Grants Cluster Special Tests and Provisions 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: There was no evidence retained that the Hospital?s recalculates debt covenants as required or performs any review of one of the two financial debt covenant calculations. Cause: The Hospital did not have an internal control process in place to ensure recalculation and review of all required covenants. Effect: The Hospital may not identify when noncompliance with debt covenants occurs. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement a control process which includes periodic calculation and review of all financial debt covenants. Views of Responsible Officials: Management agrees with the finding.

2021-004 Department of Health and Human Services CFDA 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) along with a review by a separate individual outside of the preparer. Condition: There was no evidence retained that the Hospital?s Schedule was reviewed and approved by a separate individual outside of the preparer. Cause: There was turnover of key financial positions during 2021. Due to the turnover, the Hospital did not have an internal control process in place to ensure review and approval of the Schedule. Effect: Without documentation of a secondary review and approval, demonstrating internal controls over compliance is difficult Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement a control process which includes a documented secondary review and approval. Views of Responsible Officials: Management agrees with the finding

2021-005 Department of Health and Human Services CFDA 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Material Weakness in Internal Control Over Compliance and 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: There was no evidence retained that the Hospital?s special report 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 there was no evidence of review and approval of the allowability of activities and costs that were applied to the program. Due to a clerical error, we noted an immaterial amount reported costs included in the report which were not supported in the general ledger. Cause: There was turnover of key financial positions during 2021. Due to the turnover, the Hospital did not have an internal control process in place to ensure review and approval of expenditures claimed under the federal program and the report submitted to the Department of Health and Human Services for Period 1 was documented and retained. Effect: Without documentation of a secondary review and approval, demonstrating internal controls over compliance is difficult Questioned Costs: $54,807. Context: Key line were tested on the Period 1 Department of Health and Human Services special report. Repeat Finding from Prior Years: No Recommendation: We recommend that management implement a control process which includes a documented secondary review and approval. Views of Responsible Officials: Management agrees with the finding.

GSA_MIGRATION