Audit 315058

Criteria – Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Condition – Certain policies and procedures that were in place to ensure accurate and timely financial reporting information were not being followed, such as timely bank reconciliations, reconciliations of other asset and liability accounts to the general ledger, and detailed supervisory or manager level review of work completed. Cause – The Organization historically has not utilized the complete functionality of its Enterprise Resource Planning (ERP) system, and has utilized manual spreadsheets and other documentation for these functions. There has been significant turnover in the Finance Department of the Organization including a long-term employee that was responsible for many of these procedures. The procedures were not effectively reassigned to new employees, and detailed reviews were not regularly performed when procedures were reassigned timely and accurately information. In some instances, these procedures were reassigned multiple times during the year due to turnover. In addition, the Finance Department has taken on larger roles in operating deficiencies of the Organization, which reduces their time devoted to financial reporting. Effect – During our annual audit, there was an increase in the volume of adjustments made to the Organization’s financial statements that in the aggregate, were material to the financial statements, and the 2022 consolidated financial statements were restated. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. Further, a material misstatement of the financial statement could occur and not be prevented or detected and the Board of Directors and members of management using the Organization’s internal books and records may not have complete and accurate information throughout the year. Recommendation – We recommend management review and/or redesign existing policies in place to have an effective and timely financial statement review and approval process to ensure that necessary adjustments and reconciliations to the general ledger are performed. This process should include reconciling significant statement of financial position line items to supporting schedules each month and at year end, such as bank reconciliations, accounts receivable, accounts payable, debt, depreciation schedules, etc. Auditee's comments and response – Management agrees with the finding. Management is in the process of elevating the level of supervisory personnel across the finance function, more fully implementing its Enterprise Resource Planning system to leverage available technology and system controls, continuing its training and development of team members, and implementing standardized month end procedures and related review processes. Responsible party for corrective action: Angela Riley, Chief Financial Officer. Repeat Finding: No

Criteria – Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Condition – Certain policies and procedures that were in place to ensure accurate and timely financial reporting information were not being followed, such as timely bank reconciliations, reconciliations of other asset and liability accounts to the general ledger, and detailed supervisory or manager level review of work completed. Cause – The Organization historically has not utilized the complete functionality of its Enterprise Resource Planning (ERP) system, and has utilized manual spreadsheets and other documentation for these functions. There has been significant turnover in the Finance Department of the Organization including a long-term employee that was responsible for many of these procedures. The procedures were not effectively reassigned to new employees, and detailed reviews were not regularly performed when procedures were reassigned timely and accurately information. In some instances, these procedures were reassigned multiple times during the year due to turnover. In addition, the Finance Department has taken on larger roles in operating deficiencies of the Organization, which reduces their time devoted to financial reporting. Effect – During our annual audit, there was an increase in the volume of adjustments made to the Organization’s financial statements that in the aggregate, were material to the financial statements, and the 2022 consolidated financial statements were restated. Management reviewed, approved, and accepted responsibility for the audit adjustments before the financial statements were issued. Further, a material misstatement of the financial statement could occur and not be prevented or detected and the Board of Directors and members of management using the Organization’s internal books and records may not have complete and accurate information throughout the year. Recommendation – We recommend management review and/or redesign existing policies in place to have an effective and timely financial statement review and approval process to ensure that necessary adjustments and reconciliations to the general ledger are performed. This process should include reconciling significant statement of financial position line items to supporting schedules each month and at year end, such as bank reconciliations, accounts receivable, accounts payable, debt, depreciation schedules, etc. Auditee's comments and response – Management agrees with the finding. Management is in the process of elevating the level of supervisory personnel across the finance function, more fully implementing its Enterprise Resource Planning system to leverage available technology and system controls, continuing its training and development of team members, and implementing standardized month end procedures and related review processes. Responsible party for corrective action: Angela Riley, Chief Financial Officer. Repeat Finding: No