Kids' Harbor, Inc.Non-Profit

Views of responsible officials and planned corrective actions: Management concurs with the above recommendation and will implement a second reviewer to avoid duplications and overstating of admin fees and payroll expenses.

Views of responsible officials and planned corrective actions: The Board believes it has personnel who possess suitable skill, knowledge, or experience to oversee services the auditor provides in assisting with financial statement presentation which requires a lower level of technical knowledge than the competence required to prepare the financial statements, related footnote disclosures and SEFA in accordance with the modified cash basis of accounting.

Views of responsible officials and planned correction: The Board concurs with the recommendations that Kids’ Harbor, Inc. would be best served by segregating fiscal duties as outlined above. At the current time, the additional staff sufficient to implement the recommendation is not practical to move toward a level of activity which may allow us to fully implement the recommendation. The Board will remain involved in the financial affairs of the Organization to provide oversight and independent review functions.

2022-001 Internal Control Over Preparation of Financial Statements, Related Footnote Disclosures, and Schedule of Expenditures of Federal Awards Criteria: Pursuant to SAS 115, Communicating Internal Control Related Matters Identified in an Audit, which affected the Organization for the year ended June 30, 2022, we are required to report on whether the Organization is able to prepare financial statements, related footnote disclosures, and schedule of expenditures of federal awards (SEFA) in accordance with the modified cash basis method of accounting. The preparation of financial statements, related footnote disclosures, and schedule of expenditures of federal awards (SEFA) requires internal controls over preventing, detecting and correcting misstatements of the accounting data, and drafting financial statements, related footnote disclosures and SEFA. Condition: The Organization?s ability to prepare financial statements, related footnote disclosures, and SEFA in accordance with the modified cash basis method of accounting is based, in part, on its reliance of the external auditors, who cannot by definition be considered part of the Organization?s internal controls. Context: The Organization has relied on its independent external auditors to assist in the drafting of the financial statements, related footnote disclosures, and SEFA in accordance with the modified cash basis method of accounting. Effect: With respect to ensuring that there are no misstatements or omissions that would be considered to be significant to the financial statements, related footnote disclosures and SEFA, the Organization relies on its external auditors for assistance with the modified cash basis method of accounting. Cause of Condition: In evaluating the control environment of the Organization, we considered the abilities of the Organization?s accountant, and though proficient in recording daily transactions, did not demonstrate abilities we considered necessary to prevent, detect and correct misstatements, or the ability to draft the financial statements, related footnote disclosures and SEFA in accordance with the modified cash basis method of accounting. Recommendation: We recommend that the Board of Directors be aware of the internal control deficiencies over financial reporting. And, if possible, implement procedures to ensure that the Organization has the expertise necessary to prevent, detect and correct misstatements and be capable of drafting the financial statements, related footnote disclosures and SEFA in accordance with the cash basis method of accounting. Views of responsible officials and planned corrective actions: The Board believes it has personnel who possess suitable skill, knowledge, or experience to oversee services the auditor provides in assisting with financial statement presentation which requires a lower level of technical knowledge than the competence required to prepare the financial statements, related footnote disclosures and SEFA in accordance with the modified cash basis of accounting.