THE ARC OF LEHIGH AND NORTHAMPTON COUNTIES, INC.

FINDING: 2019-001 Federal Awarding Agency: U.S Department of Health and Human Services CFDA Number and Title: 93.778 ? Medical Assistance Program Condition: Billable units for the SPARC program were improperly rounded to include non-fifteen-minute intervals. Criteria: Internal controls should have been in place to ensure that only full fifteen minutes intervals are included as billable units to the program. Cause: The software used to calculate billable units for the program was erroneously rounding time spent with program participants, which may have generated an extra unit billed per billing cycle. Effect: The miscalculated billable units resulted in the overbilling of $21,726 in the July 1, 2016 to June 30, 2017 fiscal year, $28,738 in the July 1, 2017 to June 30, 2018 fiscal year and $20,957 in the July 1, 2018 to June 30, 2019 fiscal year. Recommendation: Our recommendation is for the formula to calculate billable units be adjusted to capture only full fifteen minute intervals and for the schedule to be reviewed by supervisory personnel to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions: Recommendation was implemented in April, 2019 and the finding was fully corrected.

Arc of Lehigh and Northampton Counties, Inc. respectively submits the following corrective action plan for the year ended June 30, 2019. Name and Address of Independent Public Accounting Firm: Campbell, Rappold & Yurasits LLP 1033 S. Cedar Crest Boulevard, Allentown, PA 18103 Name and Address of Contact Person responsible for the corrective action plan: Karen L. Shoemaker, M.G.A. Executive Director Arc of Lehigh and Northampton Counties, Inc. 2289 Avenue A Bethlehem, PA 18017 Audit Period: Year Ended June 30, 2019 Section III ? Federal Award Findings Significant Deficiencies: Finding: 2019-001 Federal Awarding Agency: U.S Department of Health and Human Services CFDA Number and Title: 93.778 ? Medical Assistance Program Recommendation: Formula used to calculate billable units is to be adjusted to capture only full fifteen minute intervals and for the schedule to be reviewed by supervisory personnel to ensure accuracy. Anticipated Completion Date: Recommendation was implemented in April, 2019 and the finding was fully corrected.