Finding 972579 (2023-001)

Finding 2023-001 – Financial Close and Reporting and Delay in Reporting – Significant Deficiency Criteria – Management is responsible for establishing and maintaining effective internal control over financial reporting inclusive of meeting reporting deadlines as part of the closing process. Additionally, per Title 2, Appendix VII, the data collection form should be submitted within a nine-month period subsequent to June 30, 2023. Condition – The Center’s June 30, 2023 financial statements closing process experienced delays due to certain turnover in management, capacity constraints related to planned merger with another entity. Context – The Company did not meet their reporting deadline of March 31, 2024. Effect – The financial close and the data collection form were not submitted in a timely manner. Cause – The Center’s controls over financial close and reporting did not operate effectively during the year ended June 30, 2023. Recommendation – We recommend management strengthen its existing policies and procedures surrounding financial close and reporting, including prioritizing risks based on their potential impact on the timeliness of financial reporting. Management’s Response – Management agrees with the recommendation to strengthen existing policies and procedures surrounding financial close and reporting. Through the merger, effective October 1, 2023, CommuniCare Health Centers has adopted stronger close processes to ensure the timeliness and accuracy of reporting. CommuniCare Health Centers has adopted policies from the surviving entity, OLE Health, which include: - Month-end check lists that ensure completeness of general ledger transactions - Month-end, quarter-end and year-end deadlines that ensure timeliness of financial reporting - Additional oversight, through the hiring of an Accounting Manager, that ensures accuracy of GAAP reporting