St. William's Living Center

Condition: The Organization?s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the 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. 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 must be able to prevent or detect a material misstatement in the annual financial statements including footnote disclosures. Effect: The Organization?s financial statements and related disclosures could potentially have omissions or other errors that are material that would not be identified and corrected on a timely basis. Cause: The Organization engages Clifton Larson Allen LLP (CLA) to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, CLA 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. Recommendation: We recommend that the Organization continue to evaluate their internal staff, expertise, and assigned duties to determine if an internal control policy over the annual financial reporting is beneficial.

Condition: Substantially all duties related to financial accounting and reporting are performed by one individual. Criteria: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Context: Substantially all duties related to transactional processes are performed by one individual. Effect: It is reasonably possible that a misstatement would not be prevented or detected in a timely manner by employees in the ordinary course of business. Cause: The Organization is not large enough to employ additional persons for the purpose of segregating duties. Recommendation: We recommend the Organization implement procedures to segregate duties if possible. This could be done by having a second employee open the mail and record receipts prior to the deposit and posting of payments.

FINDING: 2019-001 ANNUAL FINANCIAL REPORTING UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) Condition: The Organization?s personnel have not monitored recent accounting developments to the extent necessary to enable them to prepare the 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. 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 must be able to prevent or detect a material misstatement in the annual financial statements including footnote disclosures. Effect: The Organization?s financial statements and related disclosures could potentially have omissions or other errors that are material that would not be identified and corrected on a timely basis. Cause: The Organization engages CliftonLarsonAllen LLP (CLA) to assist in preparing its financial statements and accompanying disclosures. However, as independent auditors, CLA 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. Recommendation: We recommend that the Organization continue to evaluate their internal staff, expertise, and assigned duties to determine if an internal control policy over the annual financial reporting is beneficial. Management?s Response: The Organization will continue to rely upon the audit firm to prepare the financial statements and related footnote disclosures and will review and approve these prior to the issuance of the annual financial statements.

FINDING: 2019-002 LIMITED SEGREGATION OF DUTIES Condition: Substantially all duties related to financial accounting and reporting are performed by one individual. Criteria: Generally, a system of internal control contemplates separation of duties such that no individual has responsibility to execute a transaction, have physical access to the related assets, and have responsibility or authority to record the transaction. Context: Substantially all duties related to transactional processes are performed by one individual. Effect: It is reasonably possible that a misstatement would not be prevented or detected in a timely manner by employees in the ordinary course of business. Cause: The Organization is not large enough to employ additional persons for the purpose of segregating duties. Recommendation: We recommend the Organization implement procedures to segregate duties if possible. This could be done by having a second employee open the mail and record receipts prior to the deposit and posting of payments. Management?s Response: Management has determined that it is not economically feasible for them to employ the additional personnel needed to adequately segregate duties; however, the Organization will review and make improvements to its internal controls when opportunities arise.