By Julie Ann Madden
The Akron Care Center ended Fiscal Year 2013 with a profit of $352,565, according to Williams & Company auditor David Radke who presented the audit report to the Care Center trustees on Dec. 17, 2013.
Even though that is down from a profit of $1.093,842 in 2012, last year’s total net position was $2,261,654 up from $1,909,089 in 2012.
The 2013 audit figures are a little confusing due to the construction monies, according to Radke. Construction-related monies, such as fundraising dollars, that city officials handle were removed from the Care Center’s financial records. However, these revenue dollars and expenditures will eventually be added back into the Care Center’s financial statements.
In simple terms, on June 30, 2013, the Care Center nursing home showed an income profit of $79,431 for FY 2013. In addition, Village South Apartments showed a year-end operating income balance of $3,835 but Village North Apartments showed a loss of $30,819, giving the three facilities an overall year-end operating income of $52,447.
Adding in the nursing home’s non-operating revenues, which were $299,185 from donations and memorials and $933 of interest income, results in the year’s $352,565 profit.
All of FY 2013 operations pertain to the old nursing home facility as the new facility wasn’t opened until Aug. 12 — after the July 1 beginning of FY 2014.
The auditors pointed out the following:
• The audit report contained no Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements.
Such missing information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context, reported David Radke.
“Our (auditors’) opinion on the basic financial statements is not affected by this missing information,” stated Williams & Company in their independent auditors’ report dated Dec. 9, 2013.
An unmodified opinion was issued on the financial statements.
There were no instances of non-compliance which is material to the financial statements.
In the audit’s Schedule of Findings, it listed the following:
• The audit did not disclose any non-compliance which is material to the financial statements.
• Material weaknesses in internal control over financial reporting were disclosed by the audit of financial statements.
A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of Akron Care Center Inc.’s financial statements will not be prevented, or detected and corrected on a timely basis.
We consider the deficiencies…(of Care Center’s internal control)…to be material weaknesses.
There were three deficiencies:
1) Segregation of Duties: The cash receipts listing, bank deposits and the posting of cash receipts to the cash receipts journal are all done by the same person.
Auditors recommended “an individual who does not have access to the accounting records should prepare the initial cash receipts listing at the time of opening the mail. This listing should be compared to the cash receipts journal and the bank deposits on a periodic basis by the administrator or a different accountant.” The staff response was “Due to the limited number of office employees, segregation of duties is very difficult. However, we will have the manager review receipts, posting and payroll on a test basis.
2) Financial Reporting: During the audit, there were material amounts of receivables, payables and capital asset additions not adjusted in the Care Center’s financial statements. Adjustments were subsequently made by the Care Center to properly include these amounts in the financial statements.
Auditors recommended the Care Center should implement procedures to ensure all receivables, payables and capital asset additions are identified and included in the financial statements. The staff response was “We will revise our current procedures to ensure the proper amounts are recorded in the financial statements in the future.
3) Financial Accounting: Bed & Breakfast (Village North): There were weaknesses identified in internal control related to the accounting for the (Village North) income. There are times when guests arrive after normal business hours; however, it appears not all stays may be getting accounted for appropriately.
Auditors recommended the Care Center should implement procedures to ensure all reservations are properly reported and all cash receipts are accounted for; and the staff’s response was “We will revise our current procedures to ensure all reservations are properly reported and all cash receipts are recorded in the financial statements in the future.
In other findings related to required statutory reporting, it was noted the actual gross salaries were not published as required for all employees in accordance with Chapter 372.13 of the Code of Iowa and an Attorney General’s opinion dated April 12, 1978.
Auditors recommendation stated, “The Care Center should publish actual gross salaries as required…”
Staff response was “We will seek legal counsel for further guidance on this requirement.”