Audit 323024

Title: Summary of Auditor's Results Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with accounting principles generally accepted in the United States. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not elect to use the 10% de minimis indirect cost rate under Uniform Guidance. 1. The independent auditor’s report expresses an unmodified opinion on whether the consolidated financial statements of St. Joseph's Rehabilitation Center, Inc.; St. Joseph’s Rehabilitation Center Foundation; and Rose Hill Foundation, Inc. (the Organizations) were prepared in accordance with generally accepted accounting principles. 2. There was a material weakness identified related to the audit of the consolidated financial statements and reported in the Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3. No instances of noncompliance material to the consolidated financial statements of the Organization, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. No material weaknesses or significant deficiencies related to the audit of the major federal award programs are reported in the Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance and on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance. 5. The Independent Auditor’s Report on Compliance for the Organizations’ major federal award programs expresses an unmodified opinion on all major federal programs. 6. There are no audit findings relative to the major federal award programs for the Organization required to be reported in accordance with Section 200.516(a) of the Uniform Guidance. 7. The programs tested as major programs included: •ALN 93.696 Certified Community Behavioral Health Clinic Expansion Grants •ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse 8. The threshold for distinguishing Types A and B programs was $750,000. 9. The Organization was determined to not be low-risk auditees.

Title: Findings - Financial Statement Audit Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with accounting principles generally accepted in the United States. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not elect to use the 10% de minimis indirect cost rate under Uniform Guidance. Finding Number 2023-001 (Material Weakness) Condition: The Organization required adjusting entries for property and equipment as well as deferred revenue and revenue on the statement of financial position and activities. Criteria: The Organization is required to report all transactions within the accounting system in the proper period and in accordance with generally accepted accounting principles (GAAP). Cause: Internal controls at the Organization did not include an effective review of impairment of certain property and recognition of certain capital grants. Effect: Audit adjustments, including a prior period adjustment, were required to correct these account balances. Recommendation: During the financial close process, perform a thorough review for impairment as well as grant terms and conditions and related impact on recognition pursuant to GAAP. Management’s Response: The Organization entered into a management service agreement which included additional finance oversight. As a result of the additional finance personnel and resources, the Organization identified corrections required which led to the prior period adjustment. A review of these accounts and related transactions will be incorporated to financial reporting close processes to ensure continued proper accounting in future reporting periods.

Title: Findings and Questioned Costs - Major Federal Award Programs Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with accounting principles generally accepted in the United States. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not elect to use the 10% de minimis indirect cost rate under Uniform Guidance. None.