JFT Recovery and Veterans Support Services

#2022-001 – Material Weakness – Segregation of Duties Criteria A good internal control structure consists of proper segregation of duties where no one person is involved in all aspects of a given transaction. This includes proper segregation of the following functions: authorization of transactions, custody of assets, and recordkeeping. Condition During the course of the audit, we noted improper segregation of duties over cash disbursements, payroll, and cash receipts: Cash Disbursements: During the year ended December 31, 2022, one individual had full signing authority on checks written from the Organization’s accounts, and also had full access to the check stock. Additionally, this individual was the one who authorized and regularly paid the expenses. This normally included making payments by cash. During the year ended December 31, 2022, the Organization did not have an accounting system in place nor were bank reconciliations performed. Payroll: During our audit, we noted that there is no documented approval of the hourly wages or salaries that are entered into the payroll spreadsheet used to generate payroll. We reviewed multiple timesheets that did not include a supervisor’s approval. We also noted that there was no review of the completed payroll registers. Cash Receipts: During our audit, we noted that the same individual opens the mail and regularly makes the deposits which could result in a misappropriation of funds, without a second level of review and reconciliation procedures between the cash received and the deposits made. We also noted that there are no procedures in place to reconcile the grant billing to the general ledger and the cash log to the bank records. Cause The Organization was unprepared for the sudden growth experienced when its grant funding increased, and did not properly implement internal controls to process its daily transactions. Effect Without proper segregation of duties over cash disbursements and receipts, funds could be misappropriated without detection by management or the Board. A lack of proper segregation over payroll controls could result in ghost employees on the Organization’s payroll or overpayment of hours and rates due to the lack of review and approval. Questioned Costs NonePerspective Information During the audit we gained an understanding of the Organization’s internal controls through inquiry and observation and by examining one item from each of the three cycles: cash receipts, cash disbursements, and payroll. Identification as a repeat finding A similar issue was noted in prior year finding #2021-001. Recommendation We recommend that the Organization implement policies and procedures which ensure that no one individual is involved in all aspects of the cash receipts, disbursements and payroll processes. The Organization should review these processes and segregate duties as much as considered practical.

#2022-002 – Material Weakness – Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for 54 employee time periods, there were no timesheets to support the amount of time allocated to the Organization’s grant programs. Cause The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs. Effect The potential effects of not having supporting documentation for the allocation of payroll expenses is the overbilling of expenses to the grant program. Questioned Costs $397,499 Perspective Information We reviewed a sample of monthly reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding is related to multiple individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization’s grant programs. Identification as a repeat finding A similar issue was noted in prior year finding #2021-002. Recommendation We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported.

#2022-003 – Material Weakness – Activities Allowed or Unallowed Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with CFR 200.430, payroll costs charged to the program are allowable when: the total compensation paid to individual employees is reasonable according to the work performed on the program and the compensation is in accordance with the established policies of the organization. Condition During the audit we noted the Organization does not have established policies and procedures over payroll. We noted that while the Organization has established hourly and salary pay rates, these rates are not formally established and approved by the Organization’s Board. Cause The cause is a lack of a proper control structure that requires Board approval of pay rates and salaries. The Organization also does not have a process in place to ensure that payroll reports are properly reviewed and approved by a second independent reviewer prior to submission to the payroll company for processing. Effect The potential effects of not having formally approved pay rates and not having payroll reports reviewed by a second level prior to payroll processing is the potential for errors and overcharging of grants. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grants for a total of 284 samples. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2021-003. Recommendation We recommend that the Organization begin to formally establish and approve employee pay rates and salaries at Official Board Meetings and that these rates are documented in the Board Minutes. The Organization should also implement procedures to include a second level review of the payroll report for accuracy and completeness prior to submission for payment.

#2022-004 – Material Weakness – Activities Allowed or Unallowed, Reporting, Cash Management, Period of Performance Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR § 75.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. **** (g) Be adequately documented.” Condition During the audit we noted the Organization reported the following expenses that were not supported by the accounting records or supporting documentation: For the monthly reports tested, we were unable to examine supporting invoices or supporting documentation for $31,721.92 of the $90,546.79 charges reviewed. Additionally, for these items, because invoices or other support was not available, we were unable to verify the service period and whether the expense was charged to the correct grant period. Cause The cause is a lack of a proper control structure that includes retention of all supporting documentation for expenses and proper tracking of expenses charged to the grant programs. Effect The potential effects are overbilling the grant program and unsupported charges. Questioned Costs $149,061 Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. We also tested nonpayroll related expenses charged to the grant. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2021-004. **** - Citations not pertinent to this finding. Recommendation We recommend that the Organization develop a system to track all expenses charged to each grant contract by month and systematically file all supporting documentation in a manner that can easily be accessed. This information must be retained in accordance with the Federal and grant guidelines. The monthly reports filed for the grants should be supported by the Organization’s accounting records and invoices. We further recommend that the Organization perform a reconciliation between the monthly reports and the accounting records.

#2022-005 – Material Weakness – Reporting Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Organization’s agreements with the Department of Military and Veterans Affairs (DMVA) requires the Organization to submit monthly progress reports no later than 13 business days after the end of each month. Per the agreements with the Drug and Alcohol Programs, "Unless otherwise specified elsewhere in this Grant Agreement, the following shall apply. Grantee shall submit monthly invoices within 30 days from the last day of the month within which the work is performed. The final invoice shall be submitted within 45 days of the Grant Agreement’s termination date. The Department will neither honor nor be liable for invoices not submitted in compliance with the time requirements in this paragraph unless the Department agrees to an extension of these requirements in writing. The Grantee shall be reimbursed only for services acceptable to the Department." Condition During the audit we were not able to obtain the monthly reports filed with the DMVA properly approved by management and there was no date to indicate that the reports were filed within the appropriate period required by the grant agreements. During our audit, we noted that the Organization reallocated expenses across budget line items without a formal budget modification or tracking of the reallocation. The reallocations were not properly documented and resulted in unsupported expenditures charged to the grant programs. Cause The Organization does not have proper internal controls which include the review and approval of monthly reports filed with granting agencies for accuracy and completeness. These policies and procedures should also ensure that all reports are filed within the timeframe in accordance with the grant contract. The Organization also lacks a formal process for budget modifications and tracking of related expense adjustments. Effect The potential effect of not having proper review and approval of monthly reports is the potential for errors in the reports that would be caught by an independent review and improper reporting to the granting agencies. Reports not submitted within the required timeframe may not be approved for reimbursement. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Drug and Alcohol Program. The finding represents errors noted in all reports reviewed. Identification as a repeat finding A similar issue was noted in prior year finding #2021-005. Recommendation We recommend that the Organization implement policies and procedures to include a second independent review of the monthly reports filed with the granting agencies for accuracy and completeness. Monthly reports should be properly signed and dated to indicate this review and timely filing of the reports. Additionally, the reports should be filed on the correct basis of accounting and only include expenses of the period for which they are filed.

#2022-006 – Material Weakness – Reporting – Schedule of Expenditures of Federal Awards Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR 75.302(b) “The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the ALN title and number, Federal award identification number and year, name of the HHS awarding agency, and name of the pass-through entity, if any. **** (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.” Condition The Organization designated an individual responsible to oversee Hamilton and Musser, PC’s preparation of the SEFA. The Organization has assumed responsibility for evaluating the completeness and accuracy of the SEFA. The expenses reported on the Schedule of Expenditure of Federal Awards (SEFA) are not properly supported by the Organization’s accounting records and supporting source documentation. Additionally, the SEFA does not necessarily include all Federal awards and expenditures of the Organization for the year ended December 31, 2022. Cause The Organization was unable to provide supporting documentation for all grants received and expenses charged to grants for the year ended December 31, 2022. Effect The effect of not maintaining proper documentation and providing a complete and accurate SEFA is the potential for under or over-reported amounts to the granting agencies. Questioned Costs None **** - Citations not pertinent to this finding. Perspective Information Summaries of the expenditures reported on the reports filed with the granting agencies were compared to total expenses recorded in the Organizations accounting records and to the grant agreements. Identification as a repeat finding A similar issue was noted in prior year finding #2021-006. Recommendation We recommend that the Organization begin to track revenues and expenses in the accounting system by source. The Organization should also develop a record keeping system to properly maintain grant documentation (agreements, receipts, invoices, etc.). This will provide more accurate data for the preparation and reconciliation of the SEFA.

#2022-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2 CFR 200.303) Travel (2 CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2021-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.

#2021-001 – Material Weakness - Segregation of Duties Criteria A good internal control structure consists of proper segregation of duties where no one person is involved in all aspects of a given transaction. This includes proper segregation of the following functions: authorization of transactions, custody of assets, and recordkeeping. Condition During the course of the audit, we noted improper segregation of duties over cash disbursements, payroll, and cash receipts: Cash Disbursements: During the year ended December 31, 2021, one individual had full signing authority on checks written from the Organization’s accounts, and also had full access to the check stock. Additionally, this individual was the one who authorized and regularly paid the expenses. This normally included making payments by cash. During the year ended December 31, 2021, the Organization did not have an accounting system in place nor were bank reconciliations performed. Payroll: During our audit, we noted that there is no documented approval of the hourly wages or salaries that are entered into the payroll spreadsheet used to generate payroll. We reviewed multiple timesheets that did not include a supervisor’s approval. We also noted that there was no review of the completed payroll registers. Cash Receipts: During our audit, we noted that the same individual opens the mail and regularly makes the deposits which could result in a misappropriation of funds, without a second level of review and reconciliation procedures between the cash received and the deposits made. We also noted that there are no procedures in place to reconcile the grant billing to the general ledger and the cash log to the bank records. Cause The Organization was unprepared for the sudden growth experienced when its grant funding increased, and did not properly implement internal controls to process its daily transactions. Effect Without proper segregation of duties over cash disbursements and receipts, funds could be misappropriated without detection by management or the Board. A lack of proper segregation over payroll controls could result in ghost employees on the Organization’s payroll or overpayment of hours and rates due to the lack of review and approval. Questioned Costs None Perspective Information During the audit we gained an understanding of the Organization’s internal controls through inquiry and observation and by examining one item from each of the three cycles: cash receipts, cash disbursements, and payroll. Identification as a repeat finding A similar issue was noted in prior year finding #2020-001. Recommendation We recommend that the Organization implement policies and procedures which ensure that no one individual is involved in all aspects of the cash receipts, disbursements and payroll processes. The Organization should review these processes and segregate duties as much as considered practical. View of responsible officials and planned corrective action In 2021 we were a small agency with minimal experience with federal and state grants. All our funding prior to this was private donations, fundraising and county funding. We grew very quickly in a short period of time. At the beginning of 2020, when we first received federal funding, we had six employees and have since grown to over 40 employees. Since the time of the audit, we have gained knowledge and have already made changes to better meet the needs of our grant providers and our organization. With the segregation of duties, we started out with just one person handling the billing and the Executive Director overseeing all fiscal aspects. In the beginning of 2023, we have added two staff that work directly with the fiscal department to help with the segregation of duties and to have improved checks and balances in this department.

#2021-002 – Material Weakness – Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for eleven of the employees, there were no timesheets to support the amount of time allocated to the Organization’s grant programs. Cause The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs. Effect The potential effects of not having supporting documentation for the allocation of payroll expenses is potential overbilling of expenses to the grant program. Questioned Costs $33,316 Perspective Information We reviewed a sample of monthly reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding is related to eleven individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization’s grant programs. Identification as a repeat finding A similar issue was noted in prior year finding #2020-002. Recommendation We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported. View of responsible officials and planned corrective action Starting in 2023 all employees of the Organization will complete formal time sheets. These sheets will be signed by the Administrative Coordinator and by the Fiscal Coordinator and then entered into the system each pay period to rectify this finding.

#2021-003 – Material Weakness – Activities Allowed or Unallowed Opioid STR Grant ALN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with CFR 200.430, payroll costs charged to the program are allowable when: the total compensation paid to individual employees is reasonable according to the work performed on the program and the compensation is in accordance with the established policies of the organization. Condition During the audit we noted the Organization does not have established policies and procedures over payroll. We noted that while the Organization has established hourly and salary pay rates, these rates are not formally established and approved by the Organization’s Board. Cause The cause is a lack of a proper control structure that requires Board approval of pay rates and salaries. The Organization also does not have a process in place to ensure that payroll reports are properly reviewed and approved by a second independent reviewer prior to submission to the payroll company for processing. Effect The potential effects of not having formally approved pay rates and not having payroll reports reviewed by a second level prior to payroll processing is the potential for errors and overcharging of grants. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2020-003. Recommendation We recommend that the Organization begin to formally establish and approve employee pay rates and salaries at Official Board Meetings and that these rates are documented in the Board Minutes. The Organization should also implement procedures to include a second level review of the payroll report for accuracy and completeness prior to submission for payment. View of responsible officials and planned corrective action JFT does have all the board minutes on file. However, because we were a small agency, salary rates were not often changed. Additionally, all salary rates and changes were always driven by the ability to obtain the funding needed. Since we were small and there was not always a lot to discuss with the board our board only met twice a year. Therefore, all salary was discussed with the board president, then taken to the board unfortunately there is no formal documentation at this time. As of 2023 our board now meets quarterly. Therefore, the following policy will be included in the fiscal manual: the JFT board of directors will hold a public meeting quarterly. All matters of pay rates and salaries will be approved at the start of each grant cycle. State and county grants will be discussed prior to the July 1 start dates, all federal will be discussed prior to October 1. Any changes in salary must be approved by the board and documented in official board minutes. All board minutes will be placed in a lock file in the Fiscal Coordinator’s office.

#2021-004 – Material Weakness – Activities Allowed or Unallowed, Reporting, Cash Management, Period of Performance Opioid STR Grant ALN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR § 75.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. **** (g) Be adequately documented.” Condition During the audit we noted the Organization reported the following expenses that were not supported by the accounting records or supporting documentation: For the monthly reports tested, we were unable to examine supporting invoices or supporting documentation for $85,874 of the $152,072 charges reviewed. Additionally, for these items, because invoices or other support was not available, we were unable to verify the service period and whether the expense was charged to the correct grant period. Additionally, we were unable to examine support for $56,528 which was reported as fringe benefit expense to the Pennsylvania Department of Military and Veterans Affairs. This amount included health insurance expense. For the year ended December 31, 2021, the Organization was unable to support $100,879 of health insurance expense reported in the accounting records or provide invoices to support all expenses reported. We were unable to test the Organization’s health insurance expense and determine how it was allocated to the grant programs. We also noted expenses totaling $50,838 that were not deemed to be reasonable for the performance of the federal awards. Cause The cause is a lack of a proper control structure that includes retention of all supporting documentation for expenses and proper tracking of expenses charged to the grant programs. Effect The potential effects are overbilling the grant program and unsupported charges. Questioned Costs $190,502 **** - Citations not pertinent to this finding. Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. We also tested nonpayroll related expenses charged to the grant. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2020-004. Recommendation We recommend that the Organization develop a system to track all expenses charged to each grant contract by month and systematically file all supporting documentation in a manner that can easily be accessed. This information must be retained in accordance with the Federal and grant guidelines. The monthly reports filed for the grants should be supported by the Organization’s accounting records and invoices. We further recommend that the Organization perform a reconciliation between the monthly reports and the accounting records. View of responsible officials and planned corrective action In 2022 and 2023 we have developed a system that better separated and tracked expenditures by grant. We have made the following adjustments already: 1. We have purchased software and a device to read and store receipts into the computer system. We have purchased and are using Quick Books. All expenditures and incoming funds will be placed into the Quick Books system. Any expenditure is then filed by grant, by month with a copy of the invoice, bill, etc. documentation as well as the receipt that corresponds. All files will be kept in a locked cabinet in the fiscal office. At the end of each year all past year records will be stored and kept for 7 years. 2. We have hired a person to do data entry and booking part time. 3. We have devoted our Administrative Coordinator to take responsibility for HR and fiscal matters to serve as a check and balance system as well as to take the larger load from the Fiscal Coordinator since we have grown. 4. The final thing JFT has done is to hire an accounting firm called The Gift to come in as a final check and balance. The Gift has been able to give our agency training on fiscal matters that were not clear, they have been able to expand our knowledge and use of the Quick Books System and helped us set up proper checks and balances to better ensure that everything that is charged to each grant is well documented.

#2021-005 – Material Weakness – Reporting Opioid STR Grant ALN 93.788 Criteria The Organization’s agreements with the Department of Military and Veterans Affairs (DMVA) requires the Organization to submit monthly progress reports no later than 13 business days after the end of each month. Per the agreements with the Drug and Alcohol Programs, "Unless otherwise specified elsewhere in this Grant Agreement, the following shall apply. Grantee shall submit monthly invoices within 30 days from the last day of the month within which the work is performed. The final invoice shall be submitted within 45 days of the Grant Agreement’s termination date. The Department will neither honor nor be liable for invoices not submitted in compliance with the time requirements in this paragraph unless the Department agrees to an extension of these requirements in writing. The Grantee shall be reimbursed only for services acceptable to the Department." Condition During the audit we noted that three monthly reports filed with the DMVA were not properly approved by management and there was no date to indicate that the reports were filed within the appropriate period required by the grant agreements. During our audit, we noted that the Organization reallocated expenses across budget line items without a formal budget modification or tracking of the reallocation. The reallocations were not properly documented and resulted in unsupported expenditures charged to the grant programs. During our testing, we noted several payments charged to the grant in one month which were not paid until the subsequent month. The Organization reports on a cash basis for grant purposes. One of these payments was made for $11,541 in January 2021 and as such has been included on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2021. However, the expense was charged to the grant on the December 2020 monthly report. Cause The Organization does not have proper internal controls which include the review and approval of monthly reports filed with granting agencies for accuracy and completeness. These policies and procedures should also ensure that all reports are filed within the timeframe in accordance with the grant contract. The Organization also lacks a formal process for budget modifications and tracking of related expense adjustments. Effect The potential effect of not having proper review and approval of monthly reports is the potential for errors in the reports that would be caught by an independent review and improper reporting to the granting agencies. Reports not submitted within the required timeframe may not be approved for reimbursement. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Pennsylvania DMVA and the Drug and Alcohol Program. The finding represents errors noted in three of the four reports reviewed. Identification as a repeat finding A similar issue was noted in prior year finding #2020-005. Recommendation We recommend that the Organization implement policies and procedures to include a second independent review of the monthly reports filed with the granting agencies for accuracy and completeness. Monthly reports should be properly signed and dated to indicate this review and timely filing of the reports. Additionally, the reports should be filed on the correct basis of accounting and only include expenses of the period for which they are filed. View of responsible officials and planned corrective action As of 2023 we will be adding the following policy to the fiscal manual and to the operations manual to read as follows: All monthly program reports shall be completed by the coordinator and sent to the Deputy Director for approval, once approved they will be sent to the Fiscal Coordinator. The Fiscal Coordinator will then complete the billing amount and fiscal narrative then the report will be reviewed by the Deputy Director. Once approved the report will be presented to the Executive Director for final review, approval and signature and date placed on each report before it is sent to the funder. All program coordinators will complete a JFT outcomes report that is placed in an electronic reporting system and these reports will be reviewed quarterly by the Deputy Director. The Deputy Director does data analysis and these reports are placed in narrative form by the Deputy Director quarterly and the year-end report. These are shared with the funders according to the reporting requirements in the grant. All reports must be to funders by the 15th of the following month, unless otherwise stated in funder contract. The following policy will also be added to the fiscal manual: All budget modifications will be written up on the budget modification form and sent to the funder electronically once approved the form will be notated and include the funders signature, written on the form verbal communication from the funder, or a copy of the email with funder approval. The following policy will also appear in the fiscal manual: All purchases will be made and reported on the proper month of billing. All purchases will be tracked as stated in the manual by an entry in the fiscal journal (Quick Books), paid, receipt and documentation will be filed under the proper grant and the proper month.

#2021-006 – Material Weakness – Reporting – Schedule of Expenditures of Federal Awards Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR 75.302(b) “The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the ALN title and number, Federal award identification number and year, name of the HHS awarding agency, and name of the pass-through entity, if any. **** (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.” Condition The Organization designated an individual responsible to oversee Hamilton and Musser, PC’s preparation of the SEFA. The Organization has assumed responsibility for evaluating the completeness and accuracy of the SEFA. The expenses reported on the Schedule of Expenditure of Federal Awards (SEFA) are not properly supported by the Organization’s accounting records and supporting source documentation. The SEFA includes $200,951 of unsupported expenditures under the major program #93.788 Opioid STR Grant. Additionally, the SEFA does not necessarily include all Federal awards and expenditures of the Organization for the year ended December 31, 2021. Cause The Organization’s designee does not have the experience to prepare the SEFA. In addition, the Organization was unable to provide supporting documentation for all grants received for the year ended December 31, 2021. Effect The effect of not maintaining proper documentation and providing a complete and accurate SEFA is the potential for under-reported amounts to the granting agencies. Questioned Costs Unknown **** - Citations not pertinent to this finding. Perspective Information Summaries of the expenditures reported on the reports filed with the granting agencies were compared to total expenses recorded in the Organizations accounting records and to the grant agreements. Identification as a repeat finding A similar issue was noted in prior year finding #2020-006. Recommendation We recommend that the Organization begin to track revenues and expenses in the accounting system by source. The Organization should also develop a record keeping system to properly maintain grant documentation (agreements, receipts, invoices, etc.). This will provide more accurate data for the preparation and reconciliation of the SEFA. View of responsible officials and planned corrective action To better prepare for the SEFA JFT has started organizing and tracking revenues and expenses in the accounting system by source. As stated earlier there have been checks and balances put into place through existing and new policies. This has been done with the above listed assigning and hiring of extra staff for the fiscal department, Quick Books, hiring of the accountants from The Gift, A new filing system, a receipt machine and the new policies that will be in the newly created fiscal manual that is being worked on currently and shall be completed by July 1, 2023.

#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.

#2020-002 ? Material Weakness ? Allowable Costs/ Cost Principles Opioid State Response Grant ASN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for two of the employees, there were no timesheets to support the amount of time allocated to the Organization?s grant programs. Additionally, we tested one monthly report for which we were unable to review timesheets to substantiate the payroll costs charged to the grant. These costs were supported only by the payroll registers. Cause The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs. Effect The potential effects of not having supporting documentation for the allocation of payroll expenses is potential overbilling of expenses to the grant program. Questioned Costs None Perspective Information We reviewed three monthly reports filed from each contract under the grant program for a total of six reports reviewed. We examined the payroll for each employee charged to the grant for a total of thirteen employees. The finding is related to three individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization?s grant programs. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported.

#2020-003 ? Material Weakness ? Activities Allowed or Unallowed Opioid State Response Grant ASN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with CFR 200.430, payroll costs charged to the program are allowable when: the total compensation paid to individual employees is reasonable according to the work performed on the program and the compensation is in accordance with the established policies of the organization. Condition During the audit we noted the Organization does not have established policies and procedures over payroll. We noted that while the Organization has established hourly and salary pay rates, these rates are not formally established and approved by the Organization?s Board. During our test of one monthly report, we also noted that the Organization overbilled the grant as a result of using incorrect payrates for the six employees tested. The resulting overcharge was $1,366. Cause The cause is a lack of a proper control structure that requires Board approval of pay rates and salaries. The Organization also does not have a process in place to ensure that payroll reports are properly reviewed and approved by a second independent reviewer prior to submission to the payroll company for processing. Effect The potential effects of not having formally approved pay rates and not having payroll reports reviewed by a second level prior to payroll processing is the potential for errors and overcharging of grants. Questioned Costs $1,366. Perspective Information We reviewed three monthly reports filed from each contract under the grant program for a total of six reports reviewed. We examined the payroll for each employee charged to the grant for a total of thirteen employees. We also tested fourteen individual nonpayroll related expenses charged to the grant. The finding represents the unsupported costs noted from this review. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that the Organization begin to formally establish and approve employee pay rates and salaries at Official Board Meetings and that these rates are documented in the Board Minutes. The Organization should also implement procedures to include a second level review of the payroll report for accuracy and completeness prior to submission for payment.

#2020-004 ? Material Weakness ? Activities Allowed or Unallowed, Reporting, Cash Management, Period of Performance Opioid State Response Grant ASN 93.788 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR ? 75.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. **** (g) Be adequately documented.? Condition During the audit we noted the Organization reported the following expenses that were not supported by the accounting records or supporting documentation: For the monthly reports tested, we were unable to examine supporting invoices or supporting documentation for nine of the charges totaling $12,320. Additionally, for these items, because invoices or other support was not available, we were unable to verify the service period and whether the expense was charged to the correct grant period. For one month, we noted that health care insurance totaling $35,101 was charged to the grant. However, we were unable to review supporting accounting records or invoices to support these expenses. During our audit, we noted that health care insurance was charged on one additional monthly report with no supporting documentation. These additional unsupported expenses totaled $32,002. Cause The cause is a lack of a proper control structure that includes retention of all supporting documentation for expenses and proper tracking of expenses charged to the grant programs. Effect The potential effects are overbilling the grant program and unsupported charges. Questioned Costs $79,423. Perspective Information We reviewed three monthly reports filed from each contract under the grant program for a total of six reports reviewed. We examined the payroll for each employee charged to the grant for a total of thirteen employees. We also tested fourteen individual nonpayroll related expenses charged to the grant. The finding represents the unsupported costs noted from this review. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that the Organization develop a system to track all expenses charged to each grant contract by month and systematically file all supporting documentation in a manner that can easily be accessed. This information must be retained in accordance with the Federal and grant guidelines. The monthly reports filed for the grants should be supported by the Organization?s accounting records and invoices. We further recommend that the Organization perform a reconciliation between the monthly reports and the accounting records. **** - Citations not pertinent to this finding.

#2020-005 ? Material Weakness ? Reporting Opioid State Response Grant ASN 93.788 Criteria The Organization?s agreements with the Department of Military and Veterans Affairs (DMVA) requires the Organization to submit monthly progress reports no later than 13 business days after the end of each month. Per the agreements with the Drug and Alcohol Programs, "Unless otherwise specified elsewhere in this Grant Agreement, the following shall apply. Grantee shall submit monthly invoices within 30 days from the last day of the month within which the work is performed. The final invoice shall be submitted within 45 days of the Grant Agreement?s termination date. The Department will neither honor nor be liable for invoices not submitted in compliance with the time requirements in this paragraph unless the Department agrees to an extension of these requirements in writing. The Grantee shall be reimbursed only for services acceptable to the Department." Condition During the audit we noted that three monthly reports filed with the DMVA were not properly approved by management and there was no date to indicate that the reports were filed within the appropriate period required by the grant agreements. We also noted that two of the monthly reports filed with the Drug and Alcohol Programs were not properly approved by management and there was no date to indicate that the reports were filed timely. We also noted that the Organization?s first submission was for a six-month period, which is not in compliance with the grant agreement. During our audit, we noted that the Organization reallocated expenses across budget line items without a formal budget modification or tracking of the reallocation. We noted that this reallocation resulted in charges made to ?unbudgeted? line items. During our testing, we noted several payments charged to the grant in one month which were not paid until the subsequent month. The Organization reports on a cash basis for grant purposes. One of these payments was made for $11,541 in January 2021 but was charged to the grant on the December 2020 monthly report. Cause The Organization does not have proper internal controls which include the review and approval of monthly reports filed with granting agencies for accuracy and completeness. These policies and procedures should also ensure that all reports are filed within the timeframe in accordance with the grant contract. The Organization also lacks a formal process for budget modifications and tracking of related expense adjustments. Effect The potential effect of not having proper review and approval of monthly reports is the potential for errors in the reports that would be caught by an independent review and improper reporting to the granting agencies. Reports not submitted within the required timeframe may not be approved for reimbursement. Questioned Costs $11,541 Perspective Information We reviewed three monthly reports filed from each contract under the grant program for a total of six reports reviewed. The finding represents errors noted in five of the six reports reviewed. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that the Organization implement policies and procedures to include a second independent review of the monthly reports filed with the granting agencies for accuracy and completeness. Monthly reports should be properly signed and dated to indicate this review and timely filing of the reports. Additionally, the reports should be filed on the correct basis of accounting - should only include expenses of the period for which they are filed.

#2020-006 ? Material Weakness ? Reporting ? Schedule of Expenditures of Federal Awards Coronavirus Relief Fund 21.019 Opioid State Response Grant ASN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with 45 CFR 75.302(b) ?The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable the CFDA title and number, Federal award identification number and year, name if the HHS awarding agency, and name of the pass-through entity, if any. **** (3) Records that identify adequately the source and application of funds for federally -funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.? Condition The expenses reported on the Schedule of Expenditure of Federal Awards (SEFA) are not properly supported by the Organization?s accounting records or supporting source documentation. After consideration of the questioned costs in the previous findings, the expenses reported on the SEFA for the Organization?s Federal programs exceed total expenses per the Organization?s cash basis accounting records by $30,604 for the year ended December 31, 2020. Cause The Organization does not utilize the accounting system to break down expenses by sources of funds. Therefore, the expenditures reported on the SEFA, were summarized from the monthly reports filed with the granting agencies for each of the Organization?s federal programs. These total federal expenditures exceeded the total expenses reported for the year in the Organization?s accounting system. Effect The effect of not properly utilizing the accounting system to track the Organization?s federal funding and reconciling the grant reports and the SEFA to the accounting system is the potential for over or under-reported amounts to the granting agencies. Questioned Costs $30,604 Perspective Information Summaries of the expenditures reported on the reports filed with the granting agencies were compared to total expenses recorded in the Organizations accounting records. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend that the Organization begin to track revenues and expenses in the accounting system by source. This will provide more accurate data for the preparation and reconciliation of the SEFA. **** - Citations not pertinent to this finding.