CORRECTIVE ACTION PLAN February 3, 2023 Crossroads Rehabilitation Center, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2022. Name and address of independent public accounting firm: Greenwalt CPAs 5432 West Vermont Street Indianapolis, IN 46224 Audit Period: Year ending June 30, 2022 The findings from the June 30, 2022, Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. MATERIAL WEAKNESS Finding 2022-001 Criteria: According to 2 CFR 200.508(a), the auditee must prepare appropriate financial statements, including the schedule of expenditures of Federal awards (SEFA) in accordance with 2 CFR 200.510. As instructed in the OMB Compliance Supplement, Provider Relief Funds (PRF) should be reported on the SEFA based on upon the PRF report that is required to be submitted to the HRSA reporting portal. For example, PRF funds received in period 2 (July 1, 2020, to December 31, 2020) should be reported on the SEFA for the fiscal year ends of December 31, 2021 through December 31, 2022. Condition: Federal awards totaling $332,841, including Provider Relief Funds received in period 2 of $178,159, were excluded from the SEFA. Cause: Crossroads had significant turnover within the accounting department and the new personnel had not been aware of the PRF funds received in a prior fiscal year. In addition, there was no overlap in the CFO position to provide for a smooth transition. Effect: An audit adjustment was made to report the three awards on the SEFA totaling $332,841. Recommendation: We recommend that Crossroads retain documentation regarding the information used to prepare the SEFA, along with notes for future years to assist with future personnel transitions. Planned Corrective Action: Crossroads will update policies, procedures and document retention plans to ensure that data is easily accessible. Instructions for completion of all audit related reports will be maintained and available to all finance personnel. Finding 2022-002 Criteria: Accounting reconciliations and supporting documentation should agree to the general ledger and be prepared and reviewed timely. Condition: Investment reconciliations, bad debt analysis and contributions receivable reconciliations had not been performed until requested during the audit. In addition, accounts receivable aging reports and depreciation reports did not agree to the general ledger. Cause: There was significant turnover within the accounting department during the year, including the Financial Accounting Manager and CFO positions. In addition, there was no overlap within the CFO position to provide for a smooth transition. This was the first-year end closing for both individuals in those positions. Effect: Audit adjustments were made resulting in a decrease of assets of approximately $4,700,000, a decrease in liabilities of approximately $400,000, and a decrease in net assets of approximately $4,300,000. Recommendation: We recommend that Crossroads create a schedule of all year-end reconciliations that need to be performed to ensure that required reconciliations are performed and reviewed timely. Planned Corrective Action: The lack of documentation and training of the Financial Accounting Manager for year-end closing processes prior to the former CFO?s departure left a significant knowledge gap. This also hindered the ability of the current CFO, who joined the organization 2 months prior to year-end, to be able to provide the required information or perform the necessary reconciliations. Going forward, all processes for month-end and year-end will be documented and followed. Accounts will be reconciled and reviewed on a monthly/quarterly/yearly basis as determined by the materiality of the account. If there are any questions regarding this plan, please contact Techia Brewer, CFO, at tbrewer@eastersealscrossroads.org.