Pillars, Inc.

Criteria: Internal control systems should include personnel with sufficient education, training and/or experience to prepare financial statements in accordance with generally accepted accounting principles (GAAP) including all required disclosures. Condition: Absence of personnel with the sufficient education, training and/or experience to prepare financial statements in accordance with generally accepted accounting principles. Cause: Due to the small size of the Organization and the limited number of accounting personnel, no individual is skilled in the preparation of financial statements in accordance with generally accepted accounting principles including all required notes. Effect: During the course of our audit, we prepared the financial statements; however, management of the Organization thoroughly reviewed them and accepted responsibility for their completeness and accuracy. Recommendation: Continue to use the services of the external audit firm to prepare the Organization’s financial statements in accordance with generally accepted accounting principles. Management's Response: The Organization agrees with the finding. It will continue to use its external auditors to prepare its financial statements. Management will continue to thoroughly review and accept responsibility for the completeness and accuracy of the financial statements.

Criteria: Internal control systems should include personnel with sufficient education, training and/or experience to record financial information in accordance with GAAP. Condition: During our audit, we identified and proposed fifteen journal entries to various general ledger accounts, which were approved and posted by management. Of the fifteen journal entries proposed and accepted by management, three were material to the financial statements as a whole. Cause: Due to the size of the Organization, limited number of accounting personnel, and turnover in key accounting personnel, the Organization missed adjustments in recording financial information in accordance with GAAP. Effect: The effect of improper accounting during the year is that management could be reviewing materially incorrect financial information. Recommendation: Recommendation The Organization should consider providing additional training to staff who records financial information. We also recommend the accounts be reconciled on a monthly basis. Management's Response: The Organization agrees with the finding. During the 2023 fiscal audit, there was turnover in the finance position which slowed the response to this finding. The Organization has engaged an external consultant other than its auditor, to modify before 2024’s fiscal year-end its policies and procedures around fixed asset management and capitalization to eliminate the need for one major material journal entry that has been handled by its auditors year after year. The Organization also will ensure that a monthly account reconciliation process is in place and adhered to by 2024 fiscal year-end.