Company: PIII
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015305
Chunk: 224

Company: P3 Health Partners Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 224
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 prevented or detected on a timely basis. The following material weaknesses were previously reported:

•We did not have adequate policies and procedures or sufficient qualified resources with appropriate technical knowledge to maintain effective internal controls over the accounting related to significant accounts and related financial statement disclosures;

•We did not design and implement a sufficient risk assessment process to identify and assess risks impacting internal control over financial reporting; 

•We had ineffective evaluation and determination as to whether the components of internal control were present and functioning;

P3 Health Partners Inc. | 2024 Form 10-K | 121

•We did not design and implement effective information technology general controls in the areas of user access related to certain information technology systems that support our financial reporting process;

•We did not maintain sufficient segregation of duties over the performance of control activities for financial close and reporting, including over the review of account reconciliations and journal entries;

•We did not design and maintain effective management review controls at a sufficient level of precision over all financial statement areas; and

•We did not design and maintain effective controls at a sufficient level of precision over the estimation of claims expense and payable including controls over the review of historical claims data, including the completeness and accuracy of data used to determine the financial statement amounts.

Remediation activities

In response to these material weaknesses, with oversight from the Audit Committee of the Board of Directors, we implemented a comprehensive remediation plan that addressed the material weaknesses identified above. Specifically, we have:

•enhanced the design of existing controls, implemented newly designed controls, and performed walkthroughs of the newly designed processes to evaluate the appropriateness of their design and implementation with the assistance of an external advisor engaged by us;

•formalized enhanced policies, procedures, and documentation for significant areas of accounting, including each area where a material weakness was identified;

•designed and implemented a risk assessment and internal controls monitoring program including hiring personnel with extensive experience in SOX compliance;

•implemented a revised information technology general controls framework that is customized to our application landscape and information risks inherent in the financial reporting process;

•implemented user access reviews across all in-scope information technology applications, standardized and improved the change management process to mitigate execution risks, and provided training to control owners; and

•designed a segregation of duties risk framework in order to establish a technology-enabled process to identify and evaluate user roles to mitigate segregation of duties conflicts.

Management’s remediation plan has resulted in an improved internal control environment with enhanced internal controls being implemented for a sufficient length of time for management to conclude