Western South Dakota Senior Services, Inc.

Condition: The Organization does not prepare the financial statements and related notes. The Organization requests its auditor to draft the year-end financial statements and related notes. Criteria: Establishing internal controls over the preparation of the financial statements and drafting the financial statements are the responsibility of management. The Organization should have a system of internal control in place related to the preparation of the financial statements. In addition, the Uniform Guidance requires the auditee to prepare appropriate financial statements in accordance with Section 200.510. Cause: The Organization does not have a system of internal control in place to prepare the financial statements, which is common for an organization of this size due to the limited number of staff. Effect: The Organization engages its auditor to draft the financial statements and related notes. There is a risk that errors may occur and not be detected. Repeat of Prior Finding: No Auditor?s Recommendation: It is the responsibility of management and those charged with governance to decide whether to accept the degree of risk associated with the Organization?s auditor drafting the financial statements because of cost or other considerations. If the Organization chooses not to accept this risk, a third-party accountant should be engaged to prepare the draft financial statements and related notes. View of Management: Management agrees with the finding. A response can be found in the Corrective Action Plan.

Condition: The Organization does not prepare the financial statements and related notes. The Organization requests its auditor to draft the year-end financial statements and related notes. Criteria: Establishing internal controls over the preparation of the financial statements and drafting the financial statements are the responsibility of management. The Organization should have a system of internal control in place related to oversight and review of the preparation of the financial statements. In addition, the Uniform Guidance requires the auditee to prepare appropriate financial statements in accordance with Section 200.510. Auditor?s Recommendation: It is the responsibility of management and those charged with governance to decide whether to accept the degree of risk associated with the Organization?s auditor drafting the financial statements because of cost or other considerations. If the Organization chooses not to accept this risk, a third-party accountant should be engaged to prepare the draft financial statements and related notes. Management?s Response: Management chooses to accept this risk. Management does not feel it is feasible or financially prudent to engage a third-party accountant. It is our opinion that very little risk is involved.