ST. JOHN'S LUTHERAN HOME OF ALBERT LEANon-Profit

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.

Criteria: The Organization is required to maintain a calculated debt reserve fund based on annual debt payments each year as stated in the Letter of Conditions. Condition: During the audit, we identified the Organization did not maintain sufficient funds in the debt reserve account. Cause: The required monthly transfers did not occur during the fiscal year. Effect: As a result of the absent transfers, the debt reserve fund was not funded to the required amountas of September 30, 2025. Recommendation: The Organization should create a plan to bring the balance into the required amount and have procedures in place to make the monthly transfers. Client Response: We have discussed our plan to bring the debt reserve fund back to current with the governing authority and have established a process to have the monthly transfers completed.

Criteria: 45 CFR § 75.512, Report Submission, requires completion of an audit and submission of the data collection form and reporting package within the earlier of thirty calendar days after receipt of the auditors’ report, or nine months after the end of the audit period. Condition: The audit and data collection form are being submitted after the required due date. Cause: The Organization had turnover in key areas and did not maintain appropriate levels of staff to ensure audit information was provided timely in order to ensure compliance with regulatory filing requirements. Effect: Noncompliance with the requirements of 45 CFR § 75.512. There is a potential for suspension or cessation of federal funding under the federal award. Recommendation: The Organization should take steps to ensure that its financial records are maintained on a current basis, reconciled timely, and audited within nine months after year end. Client Response: Client has implemented staffing it is anticipated that the audit for 2025 and related forms will be issued within the allowable time period in the loan agreements.

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.

Criteria: The Organization is required to maintain a calculated debt reserve fund based on annual debt payments each year as stated in the Letter of Conditions. Condition: During the audit, we identified the Organization did not maintain sufficient funds in the debt reserve account. Cause: The required monthly transfers did not occur during the fiscal year. Effect: As a result of the absent transfers, the debt reserve fund was not funded to the required amountas of September 30, 2024. Recommendation: The Organization should create a plan to bring the balance into the required amount and have procedures in place to make the monthly transfers. Client Response: We have discussed our plan to bring the debt reserve fund back to current with the governing authority and have established a process to have the monthly transfers completed.

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, Lethert, Skwira, Schultz & Co., cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.

Finding 2021-001 Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria: The board of directors and management share the ultimate responsibility for the Organization’s internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. The Organization engages auditors to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, LSS cannot be considered part of the Organization’s internal control system. As part of its internal control over the preparation of its financial statements, including disclosures, the Organization has implemented a comprehensive review procedure to ensure that the financial statements, including disclosures, are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of accounting principles generally accepted in the United States of America and knowledge of the Organization’s activities and operations. The Organization’s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the Organization’s financial statements and related disclosures, to provide a high level of assurance that potential omissions or other errors that are material would be identified and corrected on a timely basis. Condition: A properly designed system of internal control over financial reporting includes the preparation of an organization’s financial statements and accompanying notes to the financial statements by internal personnel of the Organization. Management is responsible for establishing and maintaining internal control over financial reporting and procedures related to the fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles (GAAP). Cause: The Organization has not adopted a policy over the annual financial reporting under GAAP; however, they have reviewed and approved the annual financial statements as prepared by the audit firm. Effect: The effect of this condition is that the year-end financial reporting is prepared by a party outside of the Organization. The outside party does not have the constant contact with ongoing financial transactions that internal staff have. Furthermore, it is possible that new standards may not be adopted and applied timely to the interim financial reporting. It is the responsibility of the Organization’s management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Recommendation: We recommend that management continue reviewing operating procedures in order to obtain the maximum internal control over financial reporting possible under the circumstances to enable staff to draft the financial statements internally. Managements Response: Management will continue to allow the audit firm to create the draft financial statements and related footnote disclosures, and will review and approve these prior to the issuance of the annual financial statements.

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