FAC Explorer

Audit 1275

FY End
2022-12-31
Total Expended
$1.40M
Findings
4
Programs
1
Organization: Th, INC (WI)
Year: 2022 Accepted: 2023-10-25
Auditor: Anderson Hager & Moe S C

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
676 2022-001 Significant Deficiency Yes ABHLN
677 2022-002 Significant Deficiency Yes ABHLN
577118 2022-001 Significant Deficiency Yes ABHLN
577119 2022-002 Significant Deficiency Yes ABHLN

Programs

ALN Program Spent Major Findings
10.766 Community Facilities Loans and Grants $1.40M Yes 2

Contacts

Name Title Type
VSWEEK6CJK13 Joann Holmberg Auditee
7154684255 Mark Beckman Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. BASIS OF PRESENTATION
Title: NOTE 2 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Title: NOTE 3 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. SUBRECIPIENTS
Title: NOTE 4 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. NONCASH ASSISTANCE
Title: NOTE 5 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. FEDERAL AWARDS EXPENDED AS INSURANCE
Title: NOTE 6 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. DE MINIMIS INDIRECT COST RATE
Title: NOTE 7 Accounting Policies: EXPENDITURES REPORTED ON THE SCHEDULE ARE REPORTED ON THE ACCRUAL BASIS OF ACCOUNTING. De Minimis Rate Used: N Rate Explanation: TH, INC DID NOT ELECT TO USE THE 10% INDIRECT COST RATE AS FUNDING RECEIVED IS THE BALANCE OWED ON COMMUNITY FACILITY LOANS RECEIVED IN PRIOR YEARS FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE AND THERE IS NO NEW ADDITIONAL FEDERAL FUNDS. CLUSTERS

Finding Details

Finding 2022-001
Condition: The Organization’s internal control system does not reliably and consistently produce adjustments to bring the accounting records into compliance with generally accepted accounting principles. Additionally, the Organization does not have a system of internal controls in place that would enable management to conclude the financial statements and related disclosures are complete and presented in accordance with U.S. generally accepted accounting principles (GAAP). This is not unusual in organizations of this size. Criteria: The Organization’s accounting records should comply with generally accepted accounting principles and the Organization should have internal controls in place to provide reasonable assurance that management takes responsibility for the financial statements. Context: The organization outsources the drafting of the financial statements to ensure they are prepared in conformity with GAAP. Cause: Several account balances are not adjusted for accruals throughout the year; rather, adjustments to those account balances are proposed at year end by auditors. The Organization’s management does not have the internal controls in place to ensure financial statements would be prepared in conformity with GAAP without outsourcing these services to experienced accountants. Effect: Significant journal entries were identified, proposed, and recorded during the audit to bring the accounting records in compliance with generally accepted accounting principles. Interim financial statements may be unreliable and inconsistent with yearend results. Because of the outsourcing of drafting the financial statements, the Organization’s management relies upon an accounting firm to draft the financial statements and related disclosures. Recommendation: We recommend the Organization adopt policies and procedures to ensure the accounting records are in compliance with generally accepted accounting principles. Additionally, procedures should remain for requiring the Organization’s management to review the drafted financial statements with the accounting firm and take responsibility for the finalized financial statements. Views of Responsible Officials and Planned Corrective Action: The Organization is recording more activity on the accrual basis of accounting and will continue to review its policies and procedures related to producing accounting records in accordance with generally accepted accounting principles. The Organization recognizes management’s responsibility for the financial statements despite being drafted by an accounting firm due the Organization’s small size and limited staff.
Finding 2022-002
Condition: The size of the office staff precludes optimal segregation of accounting functions to assure adequate internal control. The condition is not unusual in non-profit entities this size. Criteria: Internal controls should be in place so no one person handles a transaction from beginning to end and incompatible duties between functions are not handled by the same person. Context: The Organization has limited office staff performing multiple accounting duties. Cause: The Organization finds it unnecessary, due to its size, to have a large office staff in place to segregate all of the accounting functions. The cost does not outweigh the benefit at this time. Effect: Because of the small office staff, the entity relies on a limited number of individuals to handle all the accounting functions. Recommendation: Management and Board of Directors should remain aware of this situation and continue to monitor the various functions of the office staff and review detail reports to improve reliance on information prepared. Views of Responsible Officials and Planned Corrective Action: Management and the Board of Directors will continue to monitor the accounting function. Management and Board of Directors review financial transactions at board meetings.
Finding 2022-001
Condition: The Organization’s internal control system does not reliably and consistently produce adjustments to bring the accounting records into compliance with generally accepted accounting principles. Additionally, the Organization does not have a system of internal controls in place that would enable management to conclude the financial statements and related disclosures are complete and presented in accordance with U.S. generally accepted accounting principles (GAAP). This is not unusual in organizations of this size. Criteria: The Organization’s accounting records should comply with generally accepted accounting principles and the Organization should have internal controls in place to provide reasonable assurance that management takes responsibility for the financial statements. Context: The organization outsources the drafting of the financial statements to ensure they are prepared in conformity with GAAP. Cause: Several account balances are not adjusted for accruals throughout the year; rather, adjustments to those account balances are proposed at year end by auditors. The Organization’s management does not have the internal controls in place to ensure financial statements would be prepared in conformity with GAAP without outsourcing these services to experienced accountants. Effect: Significant journal entries were identified, proposed, and recorded during the audit to bring the accounting records in compliance with generally accepted accounting principles. Interim financial statements may be unreliable and inconsistent with yearend results. Because of the outsourcing of drafting the financial statements, the Organization’s management relies upon an accounting firm to draft the financial statements and related disclosures. Recommendation: We recommend the Organization adopt policies and procedures to ensure the accounting records are in compliance with generally accepted accounting principles. Additionally, procedures should remain for requiring the Organization’s management to review the drafted financial statements with the accounting firm and take responsibility for the finalized financial statements. Views of Responsible Officials and Planned Corrective Action: The Organization is recording more activity on the accrual basis of accounting and will continue to review its policies and procedures related to producing accounting records in accordance with generally accepted accounting principles. The Organization recognizes management’s responsibility for the financial statements despite being drafted by an accounting firm due the Organization’s small size and limited staff.
Finding 2022-002
Condition: The size of the office staff precludes optimal segregation of accounting functions to assure adequate internal control. The condition is not unusual in non-profit entities this size. Criteria: Internal controls should be in place so no one person handles a transaction from beginning to end and incompatible duties between functions are not handled by the same person. Context: The Organization has limited office staff performing multiple accounting duties. Cause: The Organization finds it unnecessary, due to its size, to have a large office staff in place to segregate all of the accounting functions. The cost does not outweigh the benefit at this time. Effect: Because of the small office staff, the entity relies on a limited number of individuals to handle all the accounting functions. Recommendation: Management and Board of Directors should remain aware of this situation and continue to monitor the various functions of the office staff and review detail reports to improve reliance on information prepared. Views of Responsible Officials and Planned Corrective Action: Management and the Board of Directors will continue to monitor the accounting function. Management and Board of Directors review financial transactions at board meetings.