RESTART, INC.Non-Profit

FINDING 2019-001 ? Promises to Give and Net Assets with Donor Restrictions Condition Found: Neither unconditional, outstanding promises to give nor donor-restricted net assets were identified and recorded as of December 31, 2019 or 2018; nor were complete reconciling schedules pertaining to these matters completed and provided. Criteria: According to U.S. GAAP, unconditional promises to give should be recorded when received, if both a right of release and barrier do not exist. Both UPMIFA and U.S. GAAP strictly require that contributions with donor restrictions be identified, prudently managed, and their spending activity tracked in an appropriate manner consistent with donor intent. Promises to give with donor purpose or time restrictions, or both, should be identified. Cause: There was turnover in the accounting and management teams between 2018 and 2019. This in turn contributed to natural communication breakdowns with the transfer of executive and financial duties, especially surrounding the cutoff at December 31, 2018. Further, the accounting team and management were not up-to-date on the nuances of FASB ASU 2018-08, Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. Possible Asserted Effect: Unconditional promises to give of an additional $67,226 and $220,718 were added to the existing balances at December 31, 2019 and 2018, respectively. Net assets with donor restrictions of an additional $233,804 and $443,981 were added to the existing balances at December 31, 2019 and 2018, respectively. There may be additional donor-restricted contributions unspent at December 31, 2019 that have not yet been identified or reported. Repeat Finding: There was not a similar finding in the prior year. Recommendation: Every piece of donor correspondence, whether from an individual, corporation, foundation, or other entity, should be evaluated for whether a promise to give has been received. In the not-for-profit industry, ?received? generally means ?communicated? and is not necessarily synonymous with ?collected.? A donee may receive a contribution well before it is ever actually collected and deposited into the bank account. For any such timing differences, a contribution should be recognized immediately for the total promised amount, instead of when collected. Further, every piece of donor correspondence, whether it be an email, a letter, an award agreement, a check, or ACH remittance advice must be scrutinized for the potential existence of donor restrictions. Donor restrictions may come in the form of time restrictions or purpose restrictions. In addition to identifying these, we recommend that the Organization have a mechanism to track the outstanding, unspent balances of such donor-restricted funds, releasing the restrictions in the appropriate period. Despite having a policy to treat funds with donor restrictions spent in the same fiscal year in which they were received as without donor restrictions, it would not relieve the Organization from tracking the details of the specific expenditures charged, as well as the balance of unspent donor-restricted funds. Management Response: We were made aware of the applicable contribution guidance in order to make the necessary corrections in 2020 to our accounting policies and procedures. Such revisions are being implemented immediately. We are not only applying this guidance going forward but also taking care to ensure to apply it retroactively for all promises to give in 2020 year-to-date. All these matters will be completed by December 31, 2020, at the latest, with special attention being paid to the December 31, 2020 cutoff.

FINDING 2019-002 ?Single Audit Reporting Package Submission Federal Agency: U.S. Department of Housing and Urban Development Pass through Entity: Not applicable Program Name: Continuum of Care CFDA# and Program Expenditures: 14.267 ($1,422,339) Award Number: N/A Federal Award Year: January 1, 2019 to December 31, 2019 Questioned Costs: None Condition Found: The December 31, 2018 Single Audit Reporting Package was not filed with the Federal Data Clearing House within nine months of reStart, Inc.?s year end. Criteria: Per Uniform Guidance Section 512(a) and 520(a), the Single Audit Reporting Package must be submitted by the earlier of thirty days of the receipt of the auditors? report or nine months after the end of the reporting period. Cause: The December 31, 2018 audit was not completed until July 30, 2020. Possible Asserted Effect: The Single Audit Reporting Package was not submitted timely. The Organization did not qualify as low risk for the reporting period ended December 31, 2019. Repeat Finding: There was not a similar finding in the prior year. Recommendation: The Organization will be considered high risk for the reporting period ended December 31, 2019. We recommend developing accounting procedures to ensure that the annual audit is completed timely. Management Response: There was turnover in the accounting and management teams between 2018 and 2019. The staff in place during the 2018 audit did not complete the 2018 accounting records. In addition, the Organization hired a new auditing firm to complete the 2018 audit. Because of all of the changes, the 2018 audit was not completed timely. The new accounting and management team improved policies and procedures so that the December 31, 2019 records were ready to be audited before the Single Audit Reporting Package due date. The Single Audit Reporting Package for December 31, 2019 was filed in October 2020.

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