Health Care For All, Inc.

Item # 2024-01 Inadequate Internal Controls over the recognition of revenue (Material Weakness in Internal Control over Financial Reporting) Criteria: Under U.S. Generally Accepted Accounting Standards, revenue for conditional, cost reimbursement grants is recognized when the related expenditures are incurred. Condition: Based on the results of our audit testing, we noted two material grant billings that were not recorded in the period the expenditures were incurred and were instead recorded when invoiced. Cause: Internal controls failed to detect misstatements in revenue during the year June 30, 2024. Effect: The effect of the condition was an adjustment to increase revenue (and the related by receivable) by $372,638, which was recorded in the June 30, 2024 consolidated financial statements. Auditor’s Recommendation: Management should perform a thorough analysis of revenue around fiscal year end to ensure revenue is recorded properly. Views of Responsible Officials and Planned Corrective Actions: Management understands that additional oversight and review of revenue recognition is necessary. Controls will be put into place to prevent revenue recognition issues

Item # 2024-02 Indirect Costs Incorrectly Allocated to Federal Award (Significant Deficiency in Internal Control over Federal Major Program) Criteria: Under Uniform Guidance regulations and per the terms of the federal award, the de minimis 10% indirect cost rate for indirect cost allocations must be used on federal award expenditures. The Guidance also prohibits application of 10% de minimis rate on all subgrants in excess of $25,000 during the period of performance. Condition: Based on the results of our audit testing, we noted indirect costs were allocated incorrectly during the grant period. The total known questioned costs are $1,142. Cause: Management failed to charge indirect costs correctly on the federal subaward during the year ended June 30, 2024. Effect: The effect of the condition was $1,142 in known questioned costs charged to two federal subawards during the year ended June 30, 2024. Auditor’s Recommendation: Management should perform a thorough analysis of the indirect cost allocation to ensure it is reasonable and calculated correctly in accordance with the Uniform Guidance Regulation. Views of Responsible Officials and Planned Corrective Actions: Management understands that indirect expenses incurred on federal awards must be reviewed and allocated appropriately. Management will ensure that it properly allocates indirect costs in accordance with Uniform Guidance and the terms of its federal awards.

(3) Findings and Questioned Costs – Major Federal Programs Item # 2023-001 Financial Policies and Procedures Update (Significant Deficiency in Internal Control over Federal Major Program) Criteria: 2 CFR Section 200.303 requires federal award recipients to establish and maintain effective internal controls over those awards. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted that the Organization does not have a comprehensive accounting policies and procedures manual that provides guidelines for internal control, cost allocation, financial reporting, and compliance with Uniform Guidance documentation requirements under 2 CFR Section 200.303. Cause: The Organization did not comply with the requirement for adequate internal control documentation set forth by the Uniform Guidance. Effect: Failure to have a comprehensive accounting policies and procedures manual that provides guidelines for internal control, cost allocation, financial reporting, and compliance with Uniform Guidance documentation requirements under 2 CFR Section 200.303 could result in ineffective monitoring of costs allocated to the federal program. Auditor’s Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with the Uniform Guidance. This exercise is anticipated to be complete by the end of the fiscal year.

Item # 2023-002 Allowable Costs Charged to Federal Award (Compliance Finding and Material Weakness in Internal Control over Federal Major Program) Criteria: Under Uniform Guidance regulations, all costs charged to the federal grant are those costs that can be identified specifically with a particular final cost objective, such as a federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Condition: Based on the results of our audit testing we noted thirty-two direct costs were allocated to the federal award improperly and indirect costs were allocated incorrectly during the grant period. The total known questioned costs was $69,542 and the total likely questioned costs was $2,489. Cause: Management failed to charge allowable costs correctly on the federal subaward during the year ended June 30, 2023. Effect: The effect of the condition is that there was $72,031 in known or likely questioned costs charged to the federal subaward during the year ended June 30, 2023. Information on Sampling Results: Transactions Tested - 51 Exceptions based on Accuracy/Classification of Expense - 34 Dollar Amount Selected in Sample - $553,959 Aggregate Error-Overstatement of allowable costs by $72,031 (known and likely questioned costs) The sample size selected and tested was a statistically valid sample. Auditor’s Recommendation: Management should perform a thorough analysis of all expenses charged and allocated to the federal award to ensure they are approved and recorded correctly in accordance with the Uniform Guidance Regulation. Views of Responsible Officials and Planned Corrective Actions: Given the Organization’s lack of experience with federal awards, Management was not familiar with the accounting requirements for expenses charged and allocated to the federal grant programs. Management now understands that through the Single Audit process, such expenses must be reviewed and allocated appropriately. Management will ensure that it properly allocate expenses in accordance with Uniform Guidance Regulations.