We acknowledge the auditor’s finding and agree that the prior period restatement was the result of insufficient internal oversight of Waiver billing activities previously managed by a third-party provider. Condition and Cause: The Organization relied on the expertise of a third-party billing specialist without adequate internal oversight. This led to the overstatement of Waiver services revenue over multiple years due to improper period recognition. Corrective Actions Taken and Planned: 1. Transition to In-House Billing: Alvis, Inc. has brought all Developmental Disabilities (DD) and Intermediate Care Facility (ICF) billing functions in-house. This transition provides greater control over billing accuracy, denial management, and revenue recognition. 2. Internal Oversight and Reconciliation: We have implemented internal review procedures to validate the accuracy and timing of all Waiver-related revenue. Monthly reconciliations are now conducted to ensure alignment between billing records and financial reporting. 3. Staff Training and Capacity Building: Internal staff have been trained in Medicaid Waiver billing practices and accrual-based revenue recognition to ensure proper oversight and compliance with GAAP. 4. Process Documentation and Controls: Billing workflows and internal controls have been documented and integrated into our financial close process to ensure timely and accurate reporting. Management is confident that these corrective actions will prevent recurrence and ensure the integrity of our financial statements going forward.