Audit 367060

Criteria: Management is responsible for reconciling the accounts at end of year and ensuring accounting records are kept in accordance with generally accepted accounting principles (GAAP). Condition: There were insufficient internal controls over financial reporting requiring material audit adjustments during the audit to prevent the financial statements from being materially misstated. Cause: One contributing factor to some of the material adjustments was related to the operational processes within the behavioral health division. Medicaid experienced difficulties in timely certification for Alvis’s behavioral health specialists causing significant delays in ability to bill for the services they provided, and some services were rendered to individuals who neither had private insurance nor were prequalified for Medicaid. These issues resulted in revenue that could not be collected and subsequently had to be written off. Another factor involved a third-party entity responsible for Alvis’s Waiver billing, which had been submitting incorrect billing for several years. Additionally, other significant adjustments were necessary due to internal errors. Effect or potential effect: Monthly internal financial statements not accurately representing the Organization's performance. Recommendation: To promote accurate billing, the Organization should collaborate closely with the Behavioral Health and Waiver billing departments, ensuring that all team members are informed about proper operating procedures. Additionally, the Organization must continue supporting and guiding newer accounting staff to maintain the highest standards of accuracy in financial reporting. Views of responsible officials: See attached.

Criteria: Management is responsible for reporting transactions in the proper accounting period. Condition: There were insufficient internal controls or oversight on third-party Waiver billings. Cause: The Organization was relying on the expertise of the third-party billing specialist. Effect or potential effect: For several years the Waiver services revenue was overstated. Recommendation: The Organization needs to have the requisite level of knowledge to have oversight of the third-party billing experts work to ensure it is accurate. Views of responsible officials: See attached.

Criteria: Management is responsible for submitting the audited financial statements with the Federal Audit Clearinghouse which is due nine months after the end of the audit period or 30 calendar days after the entity received the auditors report. Condition: There were insufficient internal controls over financial reporting requiring material audit adjustments during the audit to prevent the consolidated financial statements from having the audit completed timely. Cause: Due to staffing turnover and shortages all required entries needed were not recorded and management relied on auditors to propose entries after audit procedures which caused delay in completing the audit. Effect or potential effect: The filing with Federal Audit Clearinghouse will be completed after the 9 months as required and the Organization will not be considered a low risk auditee for the next two years. Recommendation: The Organization and accounting industry in general have had some significant staffing issues over the past few years that have led to the issues noted. The Organization needs to:  Assess accounting staff to ensure you have the correct number for size of Organization and proper skill set.  Ensure processes and internal controls are documented and staff has appropriate training. This will ensure the audit is completed timely and Federal Audit Clearinghouse submission is also done timely. Views of responsible officials: See attached.