CONTROLS AND PROCEDURES.
−Removed: Disclosure Controls and Procedures
−Removed: We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934 is reported, processed, and summarized within the time periods specified in the SEC’s rules and forms.
−Removed: As of September 30, 2021, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934).
−Removed: Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective, as of September 30, 2021 due to previously identified material weakness in our internal controls as we did not have adequate internal controls that ensure timely clearing of aged accounts payables arising from three-way match exceptions for items ordered through purchase orders.
−Removed: In connection with the correction associated with aged accounts payable, management identified a material weakness in the design of the Company’s controls around journal entries, specifically requiring review and approval by senior management with the requisite experience, authority and competence to determine the proper conclusion.
−Removed: In addition, management identified a material weakness around business combination accounting, specifically as it relates to the identification of all agreements and their impact on the transaction and future consideration and disclosure.
−Removed: As a result of these material weaknesses, management evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2021 and has concluded that our disclosure controls and procedures were not effective as of that date because of such material weaknesses.
−Removed: Remediation Plan and Status for Material Weakness
−Removed: In response to the identified material weaknesses, our management, with the oversight of the Audit Committee of our Board of Directors, has dedicated significant resources, including the involvement of outside advisors, and efforts to improve our internal control over financial reporting and has taken immediate action to remediate the material weaknesses identified.
−Removed: Certain remedial actions have been completed including ongoing involvement of outside advisors, reassessment of application controls within our accounts payable procure-to-pay platform and training programs around the issuance of purchase orders.
−Removed: New controls have been put in place to address the weaknesses identified for manual journal entries and purchase accounting.
−Removed: The Company will further enhance these controls over the remainder of 2021 and test the effectiveness of the new or revised controls in place.
+Added: With the participation of management, our principal executive officer and principal financial officer carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report.
+Added: Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022 because of the material weaknesses in internal control over financial reporting described below.
+Added: Notwithstanding these material weaknesses, our management, including our principal executive officer and principal financial officer, has concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with GAAP for each of the periods presented.
+Added: Material Weaknesses in Internal Control Over Financial Reporting
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: In connection with the preparation of our financial statements for 2020 and 2021, we identified certain control deficiencies in the design and operation of our internal control over financial reporting that constituted material weaknesses.
+Added: The material weaknesses are:
+Added: Material weakness related to unvouchered purchase order receipts :
+Added: We did not design and maintain effective controls over the timely clearing of discrepancies arising from our three-way-match process.
+Added: Specifically, controls were not designed appropriately to ensure that aged items were properly cleared from the sub-ledger and ultimately accounts payable.
+Added: This material weakness resulted in a restatement of previously reported results related to periods prior to December 31, 2020.
+Added: Additionally, this material weakness could result in a misstatement of accounts and disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
+Added: Material weakness related to the application of percentage-of-completion (“POC”) accounting :
+Added: We did not design or maintain effective controls over the completeness, accuracy, occurrence or determination of revenue recognized under the percentage-of-completion input method for our project-based businesses.
+Added: Specifically, controls were not designed or maintained to ensure accuracy of the costs-to-date and estimates of the cost-to-complete for certain project-based contracts.
+Added: In addition, clerical errors were noted in the determination of revenue recognized under the POC method.
+Added: This material weakness resulted in immaterial audit adjustments related to revenue and related contract assets and liabilities during the year ended December 31, 2021.
+Added: Additionally, this material weakness could result in a misstatement of accounts and disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
+Added: REMEDIATION PLAN FOR MATERIAL WEAKNESSES
+Added: To date we have implemented several process changes to limit the accumulation and aging of unmatched items.
+Added: We continue to enhance policies and systems to timely clear discrepancies and prevent an accumulation of balances.
+Added: Additionally, management is currently in the process of developing and implementing changes as a part of a comprehensive remediation plan to address the material weakness related to the application of POC accounting.
+Added: We believe the remediation activities will extend through the remainder of fiscal year 2022.
Changes in Internal Control Over Financial Reporting
−Removed: Other than those discussed above, there were no changes in the Company’s internal control over financial reporting during the third quarter of 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
−Removed: Inherent Limitations of Internal Controls
−Removed: Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations.
−Removed: Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
−Removed: Internal control over financial reporting can also be circumvented by collusion or improper management override.
−Removed: Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.
−Removed: However, these inherent limitations are known features of the financial reporting process.
−Removed: Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
+Added: Except as described above, there were no changes in internal control over financial reporting identified in the evaluation for the quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.