SOUTH MAUI LEARNING OHANA, INC.Non-Profit

SMLO South Maui Learning Ohana, Inc. a 50I c3 educational non profit Fed ID# 99-0341232 Corrective Action Plan June 30 2019 South Maui Learning Ohana, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2019. Carbonaro CPAs & Management Group 1885 Main Street, Suite 408 Wailuku, HI. 96793 Audit period: July 1, 2018 to June 30, 2019 The findings from the June 30, 2019 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS-FINANCIAL STATEMENT AUDIT AND FEDERAL AWARD PROGRAM AUDITS U.S. Department of Agriculture 2019-001 - Internal Control over Financial Reporting Community Facilities Loans and Grants-CFDA 10.766 Recommendation: It is management's responsibility to review financial statements for accuracy and ensure proper accounting is being performed. The accounting firm hired by management to account for and prepare the financial statements should have adequate technical knowledge of Generally Accepted Accounting Standards and how to apply them to the internal procedures for preparing financial statements. Action Taken: Views of Responsible Officials and Planned Corrective Action: At the end of 2019 midway through the audit for year ending June 30, 2018 South Maui Learning Ohana hired a new bookkeeping service. Due to SMLO's growth to a multi million dollar non profit with Federal loans and obligations as well as the fact that the bookkeeper was bought out by a larger firm and let go a number of key personnel SMLO found itself not getting the level of service it required and needed. The former bookkeeper was unable to provide our documents in a timely manner and many of the accounting tasks were incomplete. At that time SMLO hired a new bookkeeper with a higher level of skills. Unfortunately some of the residual effects of the previous bookkeeper found their way into this year's audit. Our new bookkeeper continues to clean up the books and is providing satisfying adequate service to our auditors. SMLO will continue to work with the auditors and the new bookkeeper to make sure that we are always improving. It should be noted that while the accounting records needed adjusting entries to be fairly stated under Generally Accepted Account Standards; SMLO had internal procedures which carried out its responsibilities in all of its transactions and made sure all income and expenses were properly documented. This would include ensuring all draws were accurately and substantiated with allowable expenses when submitted to USDA RD throughout the building process. If the U.S. Department of Agriculture has questions regarding this plan, please call Gene Zarro at 808 385 1197. Sincerely yours CEO, SMLO

2018-001

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