COMPRENEND, INC.

Recordkeeping of Expense Allocations (#93.958 Block Grants for Community Mental Health Services and #93.959 Block Grants for Prevention and Treatment of Substance Abuse) Condition: Management could not provide the support to show the justification for how certain program expenditures were allocated (specifically payroll). Criteria: In order to maintain a proper audit trail, Comprehend should keep allocation calculations that support costs charged to grants on file and readily available. Cause: The complexity of the payroll system utilized made reconciling allocations of payroll at the program level difficult. Additionally, Comprehend no longer uses this payroll provider so reconciling these items during the audit was not possible due to no longer having access to the former payroll provider’s software and payroll data. Effect: We were unable to test the accuracy of the expense allocation due to lack of supporting documentation. Questioned Cost: No material questioned costs were noted related to this finding. Indication of Repeat Finding: This is a repeat finding of 2022-003. Recommendation: We recommend that Comprehend maintains supporting documentation of all expense allocations and have it on file and readily available for the audit. Management’s Response: Effective 7/1 Comprehend switched payroll providers to Paycom. Both the CFO and Accounting Assistant have tested allocation calculations and completed an internal audit to verify that allocation calculations can be supported when requested and are readily available. As part of the quarterly closing process, the CFO will conduct an internal audit to confirm that the proper allocations are occurring and recorded.

Finding 2022-001 Account Reconciliations Condition: During our audit procedures, we discovered that account reconciliations were not performed to adjust balances to agree with supporting documentation for a number of general ledger accounts at June 30, 2022. Criteria: In order to properly state account balances, the Organization should routinely review and reconcile the consolidated statement of financial position accounts. Cause: There was significant turnover in the finance and accounting department during the year and the team currently holding the CEO, CFO, and accounting assistant positions did not start with the Organization until after year end. As a result of this turnover, the accounts were not reconciled timely. Effect: This resulted in nine adjusting journal entries as a part of the audit of the consolidated financial statements. Perspective Information: The fiscal year ended June 30, 2021 Single Audit was not issued until March 17, 2022, which left the finance and accounting staff less than four months left in the current year under audit to correct this matter before the end of the next fiscal year. Indication of Repeat Finding: This is a repeat finding of 2021-001. Recommendation: The Organization should adopt a policy requiring monthly reconciliation of all consolidated statement of financial position accounts to their supporting documentation in order to ensure the accuracy of the monthly financial statements. Consolidated statement of financial position reconciliations quickly identify errors and necessary corrections. If reconciliations are performed infrequently, errors and adjustments can occur, resulting in the need for significant corrections when the reconciliations are performed. Any reconciling differences should be corrected before the accounting records are closed for the month end. Views of Responsible Officials: Management agrees with the finding and has processes in place to ensure that all accounts related to monthly financial statements are reconciled monthly, prior to monthly financial close. This process was implemented effective January 1, 2022.

Finding 2022-002 Reporting Deadlines (Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing #93.498) Condition: The required Health Resources and Service Administration?s (?HRSA?) Provider Relief Fund (?PRF?) Portal reporting was not submitted. Criteria: Grant requirements stipulate that a completed report on the use of funds for amounts received exceeding $10,000, for the prescribed time periods, were required to be submitted to the HRSA Provider Relief Fund Portal. For Period 2 distributions, July 1, 2020 to December 31, 2020, the required HRSA reporting was required to be submitted between January 1, 2022 to March 31, 2022. Statement of Cause: There was significant turnover in the finance and accounting department during the 2021 fiscal year when this grant was received, and the terms of the grant accepted. The current CFO did not receive any communication or notice from the HRSA regarding the reporting deadline, therefore reporting was not completed. Effect: Comprehend will have to return all funds received under this grant between July 1, 2020 to December 31, 2020. Questioned Costs: As Comprehend will have to return all funds received from July 1, 2020 to December 31, 2020, the total costs allocated to the program of $645,311 are considered questioned costs. Perspective Information: We requested the reporting for the period January 1, 2022 through March 31, 2022, and Comprehend confirmed they had not submitted the required information. As defined in the grant requirements, providers who do not submit a completed report on the use of funds by the applicable reporting deadline are considered non-compliant with the grant?s terms and conditions. All non-compliant providers subject to enforcement actions will receive an official notice indicating that HRSA is seeking repayment of all PRF payments for the applicable Reporting Period. Providers will have 30 business days after receiving their Final Notice of Reporting Non-Compliance to return the payments. Indication of Repeat Finding: This is a repeat finding of 2021-004, except for a different major program. Recommendation: We recommend that Comprehend management review all grant funding for reporting deadlines, and coordinate this responsibility with the respective program directors. Views of Responsible Officials: Management agrees with the finding and has put in place processes to ensure that all required data reporting related to grants is done within Federal and state required deadlines.

Finding 2022-003 Improve Recordkeeping of Expense Allocations (Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing #93.959) Condition: Management could not provide support for program expenditures selected for testing. Criteria: In order to maintain a proper audit trail, Comprehend must keep allocation calculations that support costs charged to grants on file and readily available. Statement of Cause: The complexity of the payroll system utilized made reconciling allocations of payroll at the program level difficult. Additionally, Comprehend no longer uses this payroll provider so reconciling these items during the audit was not possible due to no longer having access to the former payroll provider?s software and payroll data. Effect: We were unable to test the accuracy of the expense allocation due to lack of supporting documentation. Questioned Cost: No material questioned costs were noted related to this finding. Perspective Information: During our testing of grant expenses, support for the expenditure or its allocation to the program could not be provided by management for fourteen out of the forty expenditures selected for testing. Indication of Repeat Finding: This is not a repeat finding. Recommendation: We recommend that Comprehend maintains supporting documentation of all expense allocations and have it on file and readily available for the audit. Views of Responsible Officials: Management agrees that the supporting documentation has to be maintained to comply with grant requirements. Comprehend is working with its payroll processing provider to develop reporting to assist with the reconciliation of payroll allocations to various programs.

Finding 2021-004 Reporting Deadlines Condition: During our testing of the timeliness of grant reporting, four of the five monthly reports reviewed were not submitted by the required deadline. Criteria: Grant requirements stipulate that invoices for payment shall be submitted to an email address at the Kentucky Department of Behavioral Health, Developmental and Intellectual Disabilities by the 15th day of the month for the previous month?s services and activities pursuant to the scope of work. Cause: There was significant turnover in the finance and accounting department during the year and the team currently holding the CEO, CFO, and accounting assistant positions did not start with the Organization until after year end. As a result of this turnover, monthly reports were not submitted timely. Effect: As defined in the grant requirements, payment of invoices shall be conditioned upon receipt of appropriate, accurate, and acceptable invoices submitted in a timely manner. The potential effect is loss of grant funding as the required reporting deadlines were not met. See Schedule of Findings and Questioned Costs for chart/table. Recommendation: We recommend that Comprehend management review all grant funding for reporting deadlines, and coordinate this responsibility with the respective program directors. Management?s Response: Management agrees with the finding and has put in place processes to ensure that all required invoicing related to grants is done within the state required deadlines.

Finding 2021-005 Special Provisions Condition: During our testing of the special provisions of the grant, we discovered that only two of the three full-time equivalent (?FTE?) requirements were met. Criteria: Grant requirements stipulate that Comprehend hire or maintain one FTE for each of the following grant-funded positions: Early Childhood Consultant (?ECC?), Collaboration Specialist, and Youth Empowerment Specialist. Cause: There has been significant turnover the at Comprehend over the last fiscal year resulting in some positions not being filled, or being filled with part-time employees. Effect: The potential effect is loss of grant funding. Recommendation: We recommend that Comprehend continue to advertise for these positions in an effort to maintain compliance requirements. During the time periods when these positions are not filled, we recommend that Comprehend?s management stay in contact with the granting agency to potentially receive a waiver of said requirements, if possible. Management?s Response: Management agrees with the finding and will put processes in place to communicate to the granting agency when situations arise where we are unable to fill open positions that are specific to the related grant.

Condition: During our testing of grant expenses, we discovered that calculations of expense allocations were not maintained by Comprehend. Criteria: In order to maintain a proper audit trail, Comprehend must keep allocation calculations that support costs charged to grants on file and readily available. Cause: The previous controller of Comprehend did not maintain the calculations of the expense allocation to that program. Effect: We were unable to test the accuracy of the expense allocation due to lack of supporting documentation. Recommendation: We recommend that Comprehend maintains supporting documentation of all expense allocations and have on file and readily available for the audit.