Audit 319539

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-003 Expenditure of Funds Outside Contract Period Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance. Criteria: Federal regulations and grant guidelines require expenditures to align with the grant’s period of performance. Organizations must obtain prior authorization from the pass-through entity for any expenditures claimed against the grant before the official grant start date. Proper internal controls should include mechanisms to ensure compliance with grant periods and approval processes for any deviations. Condition: Testing revealed that the Organization claimed expenditures against the grant that occurred before the official grant period. Although these expenditures were made outside the period of performance, they were submitted for reimbursement without securing prior authorization from the pass-through entity. Cause: The Organization's internal controls for managing grant expenditures did not sufficiently address the need for pre-authorization of expenditures incurred before the grant period. Additionally, there was a lack of effective monitoring to ensure compliance with grant start dates and required approvals. Possible or Known Effect: Claiming expenditures prior to the grant period without prior authorization could result in improper use of grant funds. This practice may impact the organization’s ability to meet grant objectives and cause misalignment between actual expenditures and grant reporting. Questioned Costs: Known questioned costs total $6,286. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-003. Recommendation: We recommend that the Organization enhance its internal controls to ensure compliance with grant periods by implementing a process to obtain prior authorization from the pass-through entity for any expenditures made before the official grant start date. Additionally, the Organization should strengthen monitoring mechanisms to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to enhance internal controls and mechanisms to ensure purchase do not occur outside grant periods.

Finding 2023-005 Misallocation of Grant Funds Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance. Criteria: The Uniform Guidance establishes criteria for allowable costs and the proper use of federal funds. According to Uniform Guidance, costs must be necessary and reasonable for the performance of the federal award and allocated correctly. Additionally, costs must be charged to the federal award based on the benefits received. Condition: The Organization claimed purchases under a reimbursement-based federal grant but then used these supplies for a different grant. This improper use of grant-funded supplies is a violation of the grant’s terms and conditions. Cause: The root cause of the noncompliance is the Organization’s failure to implement effective internal controls to ensure proper communication between departments. While the Organization was aware of the grant terms prohibiting such actions, the lack of controls and processes to coordinate the use of grant-funded supplies resulted in their misallocation. Possible or Known Effect: The misuse of resources risks undermining the programmatic impact intended by the grant. By not using the supplies as specified in the grant agreement, the Organization may fail to achieve the grant’s objectives and intended outcomes, ultimately diminishing the effectiveness of the funded program. Questioned Costs: The total questioned costs amount to $85,178, reflecting the value of supplies used improperly. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: To address the identified issue, it is crucial the Organization implement and enhance internal controls and communication processes between departments to ensure compliance with grant requirements. The Organization should implement enhancements in the tracking of supplies by grant. Additionally, the Organization should establish effective oversight mechanisms and provide training to staff on proper grant management practices. A review and revision of grant management policies are necessary to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further significantly improve on the oversight and reconciliation of supply ordering and inventory. This is already underway with the QB inventory process described previously and an improved process for backup documentation. Additionally key staff will complete of a formal course that covers performing a single audit and engage in consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-003 Expenditure of Funds Outside Contract Period Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance. Criteria: Federal regulations and grant guidelines require expenditures to align with the grant’s period of performance. Organizations must obtain prior authorization from the pass-through entity for any expenditures claimed against the grant before the official grant start date. Proper internal controls should include mechanisms to ensure compliance with grant periods and approval processes for any deviations. Condition: Testing revealed that the Organization claimed expenditures against the grant that occurred before the official grant period. Although these expenditures were made outside the period of performance, they were submitted for reimbursement without securing prior authorization from the pass-through entity. Cause: The Organization's internal controls for managing grant expenditures did not sufficiently address the need for pre-authorization of expenditures incurred before the grant period. Additionally, there was a lack of effective monitoring to ensure compliance with grant start dates and required approvals. Possible or Known Effect: Claiming expenditures prior to the grant period without prior authorization could result in improper use of grant funds. This practice may impact the organization’s ability to meet grant objectives and cause misalignment between actual expenditures and grant reporting. Questioned Costs: Known questioned costs total $6,286. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-003. Recommendation: We recommend that the Organization enhance its internal controls to ensure compliance with grant periods by implementing a process to obtain prior authorization from the pass-through entity for any expenditures made before the official grant start date. Additionally, the Organization should strengthen monitoring mechanisms to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to enhance internal controls and mechanisms to ensure purchase do not occur outside grant periods.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-003 Expenditure of Funds Outside Contract Period Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance. Criteria: Federal regulations and grant guidelines require expenditures to align with the grant’s period of performance. Organizations must obtain prior authorization from the pass-through entity for any expenditures claimed against the grant before the official grant start date. Proper internal controls should include mechanisms to ensure compliance with grant periods and approval processes for any deviations. Condition: Testing revealed that the Organization claimed expenditures against the grant that occurred before the official grant period. Although these expenditures were made outside the period of performance, they were submitted for reimbursement without securing prior authorization from the pass-through entity. Cause: The Organization's internal controls for managing grant expenditures did not sufficiently address the need for pre-authorization of expenditures incurred before the grant period. Additionally, there was a lack of effective monitoring to ensure compliance with grant start dates and required approvals. Possible or Known Effect: Claiming expenditures prior to the grant period without prior authorization could result in improper use of grant funds. This practice may impact the organization’s ability to meet grant objectives and cause misalignment between actual expenditures and grant reporting. Questioned Costs: Known questioned costs total $6,286. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-003. Recommendation: We recommend that the Organization enhance its internal controls to ensure compliance with grant periods by implementing a process to obtain prior authorization from the pass-through entity for any expenditures made before the official grant start date. Additionally, the Organization should strengthen monitoring mechanisms to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to enhance internal controls and mechanisms to ensure purchase do not occur outside grant periods.

Finding 2023-005 Misallocation of Grant Funds Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance. Criteria: The Uniform Guidance establishes criteria for allowable costs and the proper use of federal funds. According to Uniform Guidance, costs must be necessary and reasonable for the performance of the federal award and allocated correctly. Additionally, costs must be charged to the federal award based on the benefits received. Condition: The Organization claimed purchases under a reimbursement-based federal grant but then used these supplies for a different grant. This improper use of grant-funded supplies is a violation of the grant’s terms and conditions. Cause: The root cause of the noncompliance is the Organization’s failure to implement effective internal controls to ensure proper communication between departments. While the Organization was aware of the grant terms prohibiting such actions, the lack of controls and processes to coordinate the use of grant-funded supplies resulted in their misallocation. Possible or Known Effect: The misuse of resources risks undermining the programmatic impact intended by the grant. By not using the supplies as specified in the grant agreement, the Organization may fail to achieve the grant’s objectives and intended outcomes, ultimately diminishing the effectiveness of the funded program. Questioned Costs: The total questioned costs amount to $85,178, reflecting the value of supplies used improperly. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: To address the identified issue, it is crucial the Organization implement and enhance internal controls and communication processes between departments to ensure compliance with grant requirements. The Organization should implement enhancements in the tracking of supplies by grant. Additionally, the Organization should establish effective oversight mechanisms and provide training to staff on proper grant management practices. A review and revision of grant management policies are necessary to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further significantly improve on the oversight and reconciliation of supply ordering and inventory. This is already underway with the QB inventory process described previously and an improved process for backup documentation. Additionally key staff will complete of a formal course that covers performing a single audit and engage in consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-003 Expenditure of Funds Outside Contract Period Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance. Criteria: Federal regulations and grant guidelines require expenditures to align with the grant’s period of performance. Organizations must obtain prior authorization from the pass-through entity for any expenditures claimed against the grant before the official grant start date. Proper internal controls should include mechanisms to ensure compliance with grant periods and approval processes for any deviations. Condition: Testing revealed that the Organization claimed expenditures against the grant that occurred before the official grant period. Although these expenditures were made outside the period of performance, they were submitted for reimbursement without securing prior authorization from the pass-through entity. Cause: The Organization's internal controls for managing grant expenditures did not sufficiently address the need for pre-authorization of expenditures incurred before the grant period. Additionally, there was a lack of effective monitoring to ensure compliance with grant start dates and required approvals. Possible or Known Effect: Claiming expenditures prior to the grant period without prior authorization could result in improper use of grant funds. This practice may impact the organization’s ability to meet grant objectives and cause misalignment between actual expenditures and grant reporting. Questioned Costs: Known questioned costs total $6,286. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-003. Recommendation: We recommend that the Organization enhance its internal controls to ensure compliance with grant periods by implementing a process to obtain prior authorization from the pass-through entity for any expenditures made before the official grant start date. Additionally, the Organization should strengthen monitoring mechanisms to prevent similar issues in the future. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to enhance internal controls and mechanisms to ensure purchase do not occur outside grant periods.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.

Finding 2023-001 Accounting for Prepaid Expenses Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria: According to accounting principles generally accepted in the United States of America ("GAAP"), an organization must have effective internal controls over accounting for prepaid expenses to ensure that transactions are recorded in the correct accounting period. This includes properly accounting for the timing of the receipt of prepaid supplies. Condition: Invoices for prepaid supplies were included in accounts payable for supplies that were not received in the same period. This resulted in an overstatement of expenses related to the prepaid supplies, as the expenses were not properly matched with the periods in which the supplies were actually received and used. Cause: The underlying cause of the condition was a failure to account for the timing of receipt for the supplies. This indicates a deficiency in the internal controls and procedures related to the recording of prepaid expenses. Possible or Known Effect: The effect of this condition was an overstatement of expenses, which could potentially mislead financial statement users and impact decision-making. This could also lead to inaccurate financial reporting and potential non-compliance with federal grant requirements. Questioned Costs: There are no specific questioned costs identified in this finding as the overstatement impacts the accuracy of financial reporting rather than a direct disallowed cost. However, the overstatement of expenses may affect the accuracy of financial statements and compliance with grant terms. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization implement a corrective action plan to address the internal control deficiencies identified. This plan should focus on revising procedures to ensure that prepaid supplies are accurately recorded in the period in which they are received. Additionally, enhancing training for staff involved in accounting for prepaid expenses will help ensure proper understanding and execution of these procedures. Regular reviews and reconciliations of accounts payable and prepaid supplies records should be conducted to prevent similar issues in the future. Finally, performing periodic audits of internal controls will help ensure ongoing compliance with accounting standards and grant requirements. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the internal control deficiencies identified during the year 2023. As noted by the Independent Public Accounting Firm (Pile CPAs) significant improvements have occurred and in the first half of 2024 ODL implemented a new inventory accounting process through QuickBooks. This finding is addressed through this new accounting process. Overdose Lifeline moved from tracking inventory manually in excel spreadsheets to utilizing inventory management in Quickbooks Online (QBO). The process is: - Receipts: Once inventory is physically received, a QBO bill is entered identifying the quantity and cost of the items. - Shipments: Shipments are reflected on a weekly basis identifying the items and quantity shipped per item on a zero-dollar invoice. QBO utilizes FIFO (First In/First Out) methodology for inventory valuation. The physical inventory is reconciled to the QBO inventory counts monthly. Additionally the Grants and Finance Manager, Executive Team and other key personnel will conduct periodic audits of internal controls.

Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation Type of Finding: Significant Deficiency over Financial Reporting. Criteria: Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts. Condition: This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA. Cause: Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues. Possible or Known Effect: While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding. Questioned Costs: There were no questioned costs identified. Repeat Finding: This finding is a repeat from the prior year. The previous finding number was 2022-002. Recommendation: Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).

Finding 2023-004 Accounting for Revenues and Accrued Receivables Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria: According to Generally Accepted Accounting Principles (GAAP), revenues must be recorded in the period in which they are earned, even if the claims or payments are received in a subsequent period. Condition: Revenues earned during the fiscal year but claimed in the following fiscal year were inconsistently accrued as receivables. Specifically, revenues related to reimbursement-based grants were not recognized, despite expenses being recorded, and revenues were excluded even though costs of goods sold were included. Cause: The deficiency stemmed from inadequate internal controls and procedures for accruing revenues and receivables, reflecting a failure to adhere to proper revenue recognition practices. Possible or Known Effect: While the adjustments required were not material, they were significant and warrant the attention of those charged with governance. Improper accrual of revenues could mislead financial statement users and impact financial decision-making. Questioned Costs: There are no specific questioned costs identified in this finding. The issue pertains to revenue recognition practices rather than direct disallowed costs. Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: It is recommended that the organization improve its internal controls and procedures for accruing revenues. This should involve refining procedures for recognizing revenues from reimbursement-based grants and sales of supplies, enhancing staff training on GAAP revenue recognition, and regularly reviewing and reconciling accrued revenues and receivables to ensure they are recorded in the correct period. Significant discrepancies should be reviewed by those charged with governance to ensure timely resolution. Views of Responsible Officials: The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the internal controls and procedures for accruing revenues. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs) Additionally staff will regularly meet with the independent bookkeeper to review and reconcile accrued revenues ands receivables.