NEXUS FAMILY HEALING

2022-001 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 4 TIN #411419064 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.33(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statues, regulations, and conditions of the federal award. The Organization is required to submit an accurate report to HHS for each filing period of funds were received. Condition: The Organization claimed lost revenues attributable to coronavirus in which the final lost revenue calculation did not tie to the HHS Report. In addition, the Organization?s special report submitted to the Department of Health and Human Services (HHS) for Period 4 TIN #411419064 did not have documented review and approval by a separate individual outside of the preparer. Cause: The Organization did not have an internal control process in place to ensure documentation of the review and approval of the report submitted to the Department of Health and Human Services for Period 4. The Organization had a lost revenue calculation error of $1,698,708 on the HHS special report causing a difference to the actual lost revenues (i.e. there were more lost revenues reported on the HHS special report). Effect: While the calculation error provided a difference between the lost revenues on the HHS special report and the lost revenue calculation, the Organization had excess lost revenues available to be applied. This calculation error also indicated there is a lack of policies governing the review and approval of the lost revenue calculation to the HHS special report. Questioned Costs: None reported. The Organization had excess lost revenues available to be applied. Context: Key line items were tested on the Period 4 Department of Health and Human Services special report. The HHS special reports included total lost revenue calculation errors of $1,698,708. The Organization had excess lost revenues from the period 3 and period 4 HHS reports that totaled $17,305,791. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization enhance internal control policies to ensure the HHS special report is supported by accurate lost revenue calculations. This should include implementing a secondary review and approval over the lost revenue calculation. Views of Responsible Officials: Management agrees with this finding.

2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 3 and Period 4 TIN #411419064 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization?s calculation of lost revenue claimed under the federal program as an allowable cost was not subjected to formal review or approval by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy to ensure review and approval of the lost revenue calculation claimed under the federal program was documented in accordance with guidance. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: The lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Year: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and documented approval of the lost revenue calculation under the federal program. Views of Responsible Officials: Management agrees with this finding.

2021-001 U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Schedule of Expenditures of Federal Awards Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that there was no observable documentation to directly indicate that a search for price comparisons (quotes) or suspension and debarment was performed on vendors. Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect: A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts to vendors which may not meet the requirements of their procurement policy. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 transactions out of 797 total transactions was selected for testing. Required documentation related to obtaining quotes was not maintained for 22 of the items selected. Required documentation to satisfy suspension and debarment was not maintained for 22 of the items selected. Repeat Finding from Prior Year: Yes, prior year finding 2020-001 Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.

2021-002 U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Cash Management Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Schedule of Expenditures of Federal Awards Criteria: CFR 200.303 requires an organization to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Internal control procedures should ensure the reconciliation of meals recorded by the reporting system to the number of meals submitted for reimbursement by providers and the review of the calculation should be documented. Condition: Nexus has an internal control process for reviewing the meals submitted for reimbursement; however, the controls did not prevent inaccuracy of meals submitted and the reviews at all locations were not documented consistently. Cause: Nexus has designed an internal control process for reviewing the meals submitted for reimbursement, but the controls did not operate as designed. Effect: Meals submitted for reimbursement varied from the actual meals that were incurred during the year. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 4 months out of 12 total months was selected for testing. Required documentation related to the review process was not maintained for all of the months selected. Errors in the meal counts were identified in all four months tested. Repeat Finding from Prior Year: No Recommendation: We recommend management revise their internal controls to make sure the proper meal count is submitted for reimbursement and evidence of the review of the count sheets and reimbursements is maintained. Views of Responsible Officials: Management agrees with this finding.

2020-002 Department of Health and Human Services CFDA # 93.674, Foster Care Program Procurement, Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that there was no observable control documentation to directly indicate that a search for price comparisons or suspension and debarment was performed on vendors. Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect: A lack of established controls increases the overall risk that the Organization is contracting and awarding contracts to suspended or debarred vendors. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 40 transactions out of 2,630 total transactions was selected for testing. Required documentation related to the price comparison search was not maintained for ten of the items selected. Required documentation related to the search for suspension and debarment was not maintained for six of the items selected. Repeat Finding from Prior Year: No Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials: Management agrees with this finding.

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