Audit 303939

Internal Controls over Cash Disbursements MATERIAL WEAKNESS Criteria: The Organization is required to have a financial control system in place to properly account for authorized and documented financial transactions Condition: During the audit, I noted numerous instances where cash disbursements were not properly approved, recorded and/or supported by proper documentation based on my detailed review. During my testing of 40 cash disbursements, I noted that twenty-one (21) disbursements which were not properly supported by documentation and/or properly authorized. Effect: Disbursements could be misclassified or paid to unauthorized vendors as well as being paid for unauthorized and/or disallowed costs. Cause: Lack of accounting supervisory review/oversight and lack of adhering to establish policies and procedures. Questioned Costs: Undeterminable Recommendations: Management should recruit, specifically an onsite Finance Officer, and develop accounting personnel to review and enforce current policies and procedures as well as implement additional review and supervisory procedures to ensure that all disbursements are properly approved, documented and recorded

Internal Controls over Collecting Patient Accounts Receivables and Evaluating Bad Debts MATERIAL WEAKNESS Criteria: The Organization is required to maximize collections and reimbursements under Medicaid, Medicare, or any other public assistance program or private health insurance program. The Organization is also required to have a financial control system in place to evaluate and collect on patients’ accounts. Condition: The methodology for estimating the allowance for doubtful accounts was not followed. Management does not follow written policies and procedures relative to bad debt write-offs. Effect: The allowance for doubtful accounts was based on net collections realized subsequent to year end and cannot be relied upon to project future collections, which should question the effectiveness and efficiency the collection process on past due patient accounts. Cause: The Organization is not able maximize its collections and reimbursements and to evaluate its receivables based on its documented policies and/or procedures. Questioned Costs: Undeterminable Recommendation: Recruit and develop staff to implement a collection and review policy, to include but not limited to, improved technology in the billing/collecting process. Also, enforce guidelines on reviewing and making appropriate adjustments on a quarterly basis to the Bad Debt Allowance.

Internal Controls over Submission of Regulatory Reporting SIGNIFICANT DEFICIENCY Criteria: The Organization is required to have an internal control system in place to ensure that its Form 990 with the IRS and audit report with the Federal Audit Clearinghouse (FAC) are filed on a timely basis. Condition: During the audit, it was noted that Form 990 and FAC were not filed timely for FYE 5/31/2021. Effect: Late filing fines may be incurred and grant funding may be suspended until reports received. Cause: Audit engagements are not consistently planned and completed due to reasons undeterminable. Questioned Costs: Undeterminable Recommendations: Board should approve funding for audit engagements in a more timely matter as well as require the CEO and/or CFO to communicate the status of all external reporting requirements on a monthly basis regardless if there is a scheduled monthly Board meeting. Also, Board should become more involved in the planning of audit engagements

Internal Controls over Cash Disbursements MATERIAL WEAKNESS Criteria: The Organization is required to have a financial control system in place to properly account for authorized and documented financial transactions Condition: During the audit, I noted numerous instances where cash disbursements were not properly approved, recorded and/or supported by proper documentation based on my detailed review. During my testing of 40 cash disbursements, I noted that twenty-one (21) disbursements which were not properly supported by documentation and/or properly authorized. Effect: Disbursements could be misclassified or paid to unauthorized vendors as well as being paid for unauthorized and/or disallowed costs. Cause: Lack of accounting supervisory review/oversight and lack of adhering to establish policies and procedures. Questioned Costs: Undeterminable Recommendations: Management should recruit, specifically an onsite Finance Officer, and develop accounting personnel to review and enforce current policies and procedures as well as implement additional review and supervisory procedures to ensure that all disbursements are properly approved, documented and recorded

Internal Controls over Collecting Patient Accounts Receivables and Evaluating Bad Debts MATERIAL WEAKNESS Criteria: The Organization is required to maximize collections and reimbursements under Medicaid, Medicare, or any other public assistance program or private health insurance program. The Organization is also required to have a financial control system in place to evaluate and collect on patients’ accounts. Condition: The methodology for estimating the allowance for doubtful accounts was not followed. Management does not follow written policies and procedures relative to bad debt write-offs. Effect: The allowance for doubtful accounts was based on net collections realized subsequent to year end and cannot be relied upon to project future collections, which should question the effectiveness and efficiency the collection process on past due patient accounts. Cause: The Organization is not able maximize its collections and reimbursements and to evaluate its receivables based on its documented policies and/or procedures. Questioned Costs: Undeterminable Recommendation: Recruit and develop staff to implement a collection and review policy, to include but not limited to, improved technology in the billing/collecting process. Also, enforce guidelines on reviewing and making appropriate adjustments on a quarterly basis to the Bad Debt Allowance.

Internal Controls over Submission of Regulatory Reporting SIGNIFICANT DEFICIENCY Criteria: The Organization is required to have an internal control system in place to ensure that its Form 990 with the IRS and audit report with the Federal Audit Clearinghouse (FAC) are filed on a timely basis. Condition: During the audit, it was noted that Form 990 and FAC were not filed timely for FYE 5/31/2021. Effect: Late filing fines may be incurred and grant funding may be suspended until reports received. Cause: Audit engagements are not consistently planned and completed due to reasons undeterminable. Questioned Costs: Undeterminable Recommendations: Board should approve funding for audit engagements in a more timely matter as well as require the CEO and/or CFO to communicate the status of all external reporting requirements on a monthly basis regardless if there is a scheduled monthly Board meeting. Also, Board should become more involved in the planning of audit engagements