NORWELL VISITING NURSE ASSOCIATION, INC.Non-Profit

Finding Number: 2021-001 Criteria: Management is responsible for designing, implementing, establishing and maintaining effective internal control over financial reporting that provides reasonable assurance that the internal controls will prevent misstatements, intentional or unintentional, from occurring, or detect and correct misstatements on a timely basis. Condition Found: An individual involved in the cash disbursements and bank reconciliation process had access to all elements of the processes without sufficient mitigating controls to help prevent and detect misstatements. Cause and Effect: The condition identified is due to the small size of the Association?s finance department. Compensating controls should be implemented to ensure a documented, independent review of critical accounting functions exists. Limited segregation of duties over financial reporting creates a significant risk to the Association that misstatements, whether intentional or unintentional, could occur. Repeat Finding: No Recommendation: To improve controls over the financial reporting process, we recommend the Association either have another individual review bank reconciliations or assign the responsibility to another individual, review employee access to determine if the roles are appropriate based on job responsibilities, and create a system generated report that details new vendors and critical vendor maintenance and implement an independent review of this report on a recurring basis.

Finding Number: 2021-002 Criteria: Management is responsible for designing, implementing, and maintaining effective internal control over financial reporting that provides reasonable assurance that the internal controls will prevent misstatements, intentional or unintentional, from occurring, or detect and correct misstatements on a timely basis. Condition Found:Key components of internal control include timely, monthly reconciliations and documented reviews thereof by a person other than the preparer that provides evidence that the control is in place and effective. We noted several reconciliations of key accounting areas that were not complete, not performed timely, and did not have an independent review by an individual other than the preparer. Cause and Effect: The condition identified is due to the small size of the Association?s finance department and turnover in the finance department during the year. Un-reviewed, incomplete and un-timely reconciliations create a risk to the Association that misstatements, whether intentional or unintentional, could occur. This condition resulted in write-offs of unreconciled differences in accounts payable and accounts receivable of $61,977 and $127,922, respectively, and resulted in an increase to in nets assets without donor restrictions of $65,945. Repeat Finding: No Recommendation: To improve controls over the reconciliation process, we recommend that the Association develop a monthly checklist that provides documentation of the preparer and reviewer of all key account reconciliations to provide documented evidence that the control is taking place and that the reconciliations are being performed timely and accurately, and reviewed by another individual.

Criteria: Management is responsible for ensuring contributions with donor restrictions are properly recorded, and released timely from restriction when restrictions are met. This activity should be supported by applicable accounting or performance records, and fairly presented in accordance with requirements of donative instruments. Condition Found: We identified contributions with donor restrictions received during the year that were not properly accounted for as net assets with donor restrictions. Such funds should be released from restriction as the Association incurs qualifying expenditures or otherwise meets the donor?s restrictions. Cause and Effect: These misstatements were due to management lacking processes to ensure that contributions with donor restrictions, and related releases, were tracked and accounted for properly. This condition resulted in an collaborative adjustment that increased net assets with donor restrictions by $146,765. Repeat Finding: No Recommendation: We recommend contributions with donor restrictions be analyzed regularly to determine if qualifying expenditures have been incurred to provide reasonable assurance such contributions are released from restriction timely.