SERENITY SUITES SENIOR LIVING AT WABASSO

US Department of Agriculture CFDA #10.766 Community Facilities Loans and Grants 2019-003 Reporting Material Weakness in Internal Control over Compliance and Noncompliance Criteria: The Organization is required to submit quarterly management reports to the U.S. Department of Agriculture Rural Development (USDA) that include a current balance sheet and year to date income and expense figures within 30 days of the end of each quarter and submit the audit report no later than 150 days after the end of the fiscal year. The Organization is also required to submit an annual budget with a current rate schedule and a current listing of the Board and their terms. Condition: During testing performed, it was determined that the Organization did not submit required reports to USDA within the period established in the Letter of Conditions. Questioned Costs: None. Context/Sampling: Quarterly reports, annual reports, and budgets were subject to testing. Cause: The Organization did not know who to send reports to at the local USDA office. Effect: Inadequate controls over this area of compliance result in a reasonable possibility that the Organization will not submit reports as required by the Letter of Conditions. Repeat Finding from Prior Year: No. Recommendation: We recommend the Organization implement internal controls over reporting in order to ensure that complete and accurate reports are sent to USDA in a timely manner. Views of Responsible Officials: Management agrees with the finding.

Finding 2019-003 Reporting Noncompliance and Material Weakness in Internal Control over Compliance Initial Fiscal Year Finding Occurred: 2019 Finding Summary: The Organization is required to submit required reports to the USDA within the period established in the Letter of Conditions. Responsible Individuals: Chris Knoll, Management Company Corrective Action Plan Corrective Action Plan: Due to staff turnover at the local USDA office, there was no USDA representative assigned to the Organization to send required reports to. Once the Organization was notified that a new representative was assigned, the Organization provided the required reports to USDA. Anticipated Completion Date: January 2020