ValleyLife and Related Entities

Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did have two individuals involved in the reporting process, but did not have documented controls over the preparation and corresponding review of the required reporting during the period. Cause: The Organization has limited staffing and did not have proper controls in place relating to review of the prepared report. Effect: There is a reasonable possibility that the Organization could submit inaccurate information. Questioned Costs: None reported. Context: Sampling was not used. One key line item was tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

Finding 2022-001 Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA #93.498 Finding Summary: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Organization did have two individuals involved in the reporting process, but did not have documented controls over the preparation and corresponding review of the required reporting during the period. Responsible Individuals: Donna Cordova, CFO and Cletus Thiebeau CEO Corrective Action Plan: VALLEYLIFE will add documentation in its Accounting & Finance Policies and Procedures that Federal Grant reporting will be reviewed, prior to submission to the federal granting agency, by the Supervisor of the individual preparing the reports. Anticipated Completion Date: This process will go into effect immediately and will be presented to the Finance Committee of the Board of Directors for approval at its March 2023 meeting as the VALLEYLIFE bylaws require.

Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did not have proper review procedures in place to determine employees? qualifications for individual incentive pay that was allocated to the program. Cause: The Organization has limited staffing and did not have proper controls in place relating to review of incentive pay per individual. Effect: There is a reasonable possibility that the Organization could submit inaccurate information. Questioned Costs: None reported. Context: A nonstatistical sample of 60 transactions were selected for testing or $31,103 out of $780,498 of eligible expenditures. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program. Views of Responsible Officials: Management agrees with the finding.

Finding 2022-002 Federal Agency Name: Department of Health and Human Services Program Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA #93.498 Finding Summary: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Organization did not have proper review procedures in place to determine employees? qualifications for individual incentive pay that was allocated to the program. Responsible Individuals: Donna Cordova, CFO Corrective Action Plan: The CFO will review supporting documentation to provide a secondary review and approval of the summarized final expenditures listing used to claim allowable costs under federal programs. Anticipated Completion Date: This process will go into effect immediately.