WATERMAN COMMUNITIES, INC.Non-Profit

Finding Type: Compliance and Significant Deficiency. Condition: During our testing of internal control over the preparation of the Schedule of Expenditures of Federal Award (the ?Schedule?), it was noted that a reporting error had occurred in the Community?s HHS Reporting Portal submission. Specifically, certain costs were reported on an incorrect line item on the Other PRF Expenses section within the HHS reporting portal. Criteria: Internal controls should be in place that provide reasonable assurance that expenditures are being properly recorded in the specific categories in the PRF Reporting Portal. Cause: There were not sufficient procedures to review the documentation before submission to HRSA. Effect: Certain costs were reported on an incorrect line item on the Other PRF Expenses section within the HHS reporting portal. However, this reporting error did not result in a direct or material effect on the Schedule and there were sufficient excess costs, expenditures and lost revenues, incurred to prevent, prepare for and respond to COVID-19, to support the full utilization of the PRF distributions received. Accordingly, while we are reporting the error as a finding, it does not result in a questioned cost. Recommendation: Procedures should be implemented requiring review of the supporting documentation and the classification of the categories that is being reported to ensure that the amounts are reported in the appropriate categories in the PRF Reporting Portal. Questioned Costs: None Management?s Response and Planned Corrective Actions: The Community agrees with the finding and the recommended procedures will be implemented.