MESA INDEPENDENT LIVING

• Criteria or specific requirement: Proper Documentation Finding 2023-1 • Condition: Document management and retention polices need to be implemented and adhered to. Certain documents were either missing or difficult to obtain. • Context: At times requested documents were not found or were only found after an exhaustive search. • Effect: Internal control polices and procedures with respect to document management and retention are not sufficient or are not in place which can affect the financial statements. • Cause: Management has not instituted nor monitored a proper document retention policy. • Recommendation: Management should develop and consistently monitor a document retention policy and ensure that the procedures are adhered to. Management’s response: Mesa maintained an Amazon account that was used for the purchase of approximately 20 small office supply orders totaling $2,170. This account was closed and access to receipts were lost. MESA utilizes a Missing Receipt Form in the event that a receipt is not available. This form was used in the case of these missing Amazon purchase receipts. On three (3) occasions, MESA did not have easy access to physical invoices for manual labor that were ultimately identified. On one (1) occasion, MESA was not able to identify an invoice associated with the delivery of an item. A Missing Receipt Form, evidence of communication regarding the services rendered, and cost associated with the delivery was utilized to document the expenditure.

• Information on the federal program: California Department of Housing and Community Development Finding 2023-2: Pass-through County of Ventura: Homekey Round 2 • Criteria or specific requirement: Received funds were to be held in an interest-bearing account. • Condition: Funds were not held in an interest-bearing account. • Questioned costs: No matters were reported • Context: No matters were reported • Effect: Not in compliance due to funds not being held in an interest-bearing account. • Cause: Funds were not held an interest-bearing account. • Recommendation: Remainder of funds should be transferred into an interest-bearing account. • Management’s response: The majority of Homekey Round 2 funds were spent upon receipt in order to satisfy a bridge loan to purchase the subject property.

• Criteria or specific requirement: Proper Documentation Finding 2023-3 • Condition: There was little to no evidence that invoices and documents for payment were properly reviewed and/or approved by management. • Context: The results of the internal control testing for cash disbursements indicated little to no evidence of management’s review and approval on each individual supporting document. • Effect: Internal control polices and procedures with respect to documenting management review and approval are not sufficient or are not in place which can affect the financial statements. • Cause: Internal control policy for the proper documentation and management review and approval process is not in place or is not being adhered to. • Recommendation: Management should develop and consistently monitor a policy to document the review and approval of each document for payment and ensure that the procedures are adhered to. • Management’s response: All invoices and documents for payment are reviewed by the Director of Operations and the Executive Director during weekly meetings prior to payment. All invoices and documents for payment are saved and attached to the payment in MESA’s accounting software. The Executive Director reviews all monthly bank statements for irregularities. The Accounting Advisor reconciles all bank accounts, maintains the general ledger and supports the preparation of monthly and year end financial statements. These policies are maintained in MESA’s Accounting Manual and are adhered to. Management recognizes that affixing documentation of review and and approval of each supporting document is needed to verify that this policy is being followed and amended the Accounting Manual to reflect these changes immediately.