LIFETIME INDEPENDENCE FOR EVERYONE, INC.

2023-002 (2022-002) – Allocation Percentage Charged – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2023 Condition: The Organization allocated nonpayroll costs between grants using an incorrect calculation in 2 out of 40 items tested. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entities is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR 200.405(a)(2), costs allocated to a Federal award must be distributed in proportions that may be approximated using reasonable methods. Effect: The Organization may unintentionally under/over charge expenses to the grant which could lead to questioned costs and repayment of funds to the grantor agency. Cause: The Organization does not have proper controls in place to verify the approved allocation % is charged on expenses. Questioned Costs: Known questioned costs of $27 and likely questioned costs of $939.

2023-003 (2022-003) – Payroll Time Approval – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2023 Condition: During our review of payroll related transactions, 2 of the 25 payroll samples tested did not have review and approval of the Executive Director or Employee on the timecard. Criteria: 2 CFR section 200.303 – Internal Controls of the Uniform Guidance states that the non-federal entity must: (a) Establish and maintain effective internal controls over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Effect: The Organization may unintentionally under/over compensate what is applicable for the work performed by that employee. This could lead to questioned costs and repayment of funds to the grantor agency. Cause: The Organization does not have proper controls in place to verify that documentation was maintained to indicate the employees’ time paid under the Federal grant. Questioned Costs: No questioned costs identified.

2023-004 (2022-004) – Classification of Consumer Goals – Significant Deficiency in Internal Controls over Compliance ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2023 Condition: Eligibility dates were not matching between the ILS system and DRS system on 4 of 40 consumers tested. Criteria: 2 CFR 200.303 requires a non-Federal entity to Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ issued by the Comptroller General of the United States and the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per ILS Program Standards 5.6.3.5 Revision 19-1, all entries to the Independent Living Services Data Reporting System made by the service provider will be considered a part of the consumer case file. Each consumer case file must minimally meet the requirements of 34 CFR, Subtitle B, Chapter III, Part 364, §364.53, and provide documentation concerning: the consumer’s goals for independence and anticipated methods and services to achieve the goals. Effect: The Organization may unintentionally provide services to ineligible consumers. Cause: Lack of internal controls at the Organization to ensure that eligibility dates are appropriate in both the ILS and DRS system. Questioned Costs: No questioned costs identified.