Incompass Human Services Inc.

“During fiscal year 2016, management discovered certain amounts that had been reported as reimbursable program costs were, in fact, unsubstantiated expenses. Management, under the direction of the lifelinks' board of directors, performed a comprehensive internal investigation of expenditures pertaining to this program. This investigation spanned fiscal years 2009 through 2016 and identified approximately $286,000 of unsubstantiated expenses that were previously charged as reimbursable program costs to the commonwealth of massachusetts (the commonwealth). Management has since reissued the uniform financial reports (ufr) for fiscal years 2009 through 2015 to properly categorize these expenditures as non-reimbursable program costs. The restatement of the ufrs resulted in a liability to the commonwealth totaling $165,637. These amounts are included in loss - unsubstantiated expenses for the year ended june 30, 2016. In addition, the unsubstantiated expenses for fiscal year 2016 totaled $75,650 and are reflected as unsubstantiated expenses. These amounts increased the liability due to the commonwealth by $62,818 to $228,455 as of june 30, 2016. Management has filed a claim for reimbursement with the lifelinks' insurance carrier pertaining to the aforementioned losses. The result of the claim is not determinable at this time. Accordingly, no amounts are reflected in the accompanying financial statements pertaining to the potential result of the claim.”

“The 990 is emailed to the board for review and then a vote is taken to approve the 990 before it is filed.”

“New hires must disclose any relationships with current lifelinks' employees. Written lifelinks policies address conflicts of interest. Board of directors must annually declare in writing any related party interests.”

“Annual performance review, with salary adjustments appropriate to lifelinks, inc. And salary ranges for industry, specialty, and geographic market. Written evaluation form by ad-hoc board of directors committee, and individual board member assessments are made of the ceo. Examples of the tools used for salary evaluation include but are not limited to " a compensation and benefits survey of and for nonprofits in massachusetts, rhode island and adjoining communities 2014."”

“Annual reports are distributed to interested parties. Pertinent information is posted in newsletters and on lifelinks' website. Also, financial statements are publically available on the state's osd website, as well as on the guidestar non-profit web site and on the lifelinks website.”

“Information on how to access these documents or request copies is available on the lifelinks website.”

“Unrealized gain on carrying value of interest rate swap contract 46,214. Loss - unsubstantiated expenses -228,455.”

“Lifelinks audit process did not change from the prior year. Lifelinks has a committee that assumes responsibility for oversight of the audit of their financial statements audited by an independent accountant.”