UNITED CHURCH OF CHRIST HOMES

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Management is responsible for ensuring records are kept that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Management had detail to support their infection control expenses and followed their internal control processes however those expenses were also reported to the State of PA (DHS) to justify use and acceptance of the PA Act 24 of 2020 funds received in 2020. There should have been in place controls and processes to distinguish which expenses are going to be charged to each program. Questioned costs: None Context: 31 transactions were known to have been reported to the State of Pennsylvania as costs incurred to satisfy the retention and use of Coronavirus Relief Funds from PA Act 24 of 2020. These costs were also reported as Infection Control to the Department of Health of Human Services. Cause: There was not in place a process or control to distinguish and document which expenditures/invoices would be applied to State of Pennsylvania Act 24 of 2020 funds and those that would be applied to COVID-19 Provider Relief Infection Control funds. Effect: Noncompliance with the grant awards could ultimately lead to the payback of costs or loss of future funding. Repeat Finding: No Recommendation: Put in place processes and controls to identify and document which expenses are to be applied and reported to each program at the invoice level so there is no overlap. Views of Responsible Officials: Please refer to United Church of Christ Homes Inc.?s Corrective Action Plan.

Recommendation: Management should put in place processes and controls to identify, assign and document which expenses/invoices are to be applied to each program at the invoice level. Explanation of Disagreement with Audit Finding: There is no disagreement with the audit finding. Action taken in response to finding: We will adopt these practices and continue to evaluate the process to help ensure efficiency and accuracy as we continue throughout the fiscal year. Name of the contact person responsible for corrective action: Larry Kilpatrick, Chief Financial Officer? Phone: 717-303-1502 Email: lkilpa@ucc-homes.org Planned completion date for corrective action plan: September 30, 2022