Audit 24609

Financial Statement Findings Finding No. 2022-1 Review Processes of Estimates Calculated Using Manual Spreadsheets Significant Deficiency Condition: Be a Champion Inc. (the ?Organization?) recognizes in-kind contributions for the site facilities usage of classrooms and cafeterias, as well as custodian services provided by each school location where meals are served. The calculations used to determine the fair value of in-kind contributions in accordance with accounting principles generally accepted in the United States of America (?GAAP?) are maintained in manual spreadsheet developed by the Organization. Review procedures for the spreadsheet did not include a step to verify that all totals in the spreadsheet are appropriately calculated. We noted that one of the totals left out several line items in the calculation resulting in an understatement of the in-kind contribution and facilities usage expense. Criteria or specific requirement: GAAP requires nonfinancial (or in-kind) contributions to be recorded at the fair market value as revenues and expenses that do not result from cash receipts and cash payments. In addition, internal control procedures should be sufficiently effective to allow management or employees to prevent or detect and correct misstatements on a timely basis.Effect: In-kind contributions and related facilities usage expense were understated by the same amount. Cause: The manual spreadsheet goes through multiple versions and reviews prior to being finalized. However, the review process did not include a step to check that totals on the final version are properly calculated. Recommendation: On the final version of the spreadsheet that manually calculates fair value estimates of in-kind contributions, management should perform a standardized review and approval process of the spreadsheet that includes a step to check that totals are properly calculated. Any differences should be corrected by the preparer of the spreadsheet with corrections verified by the reviewer.

Financial Statement Findings Finding No. 2022-1 Review Processes of Estimates Calculated Using Manual Spreadsheets Significant Deficiency Condition: Be a Champion Inc. (the ?Organization?) recognizes in-kind contributions for the site facilities usage of classrooms and cafeterias, as well as custodian services provided by each school location where meals are served. The calculations used to determine the fair value of in-kind contributions in accordance with accounting principles generally accepted in the United States of America (?GAAP?) are maintained in manual spreadsheet developed by the Organization. Review procedures for the spreadsheet did not include a step to verify that all totals in the spreadsheet are appropriately calculated. We noted that one of the totals left out several line items in the calculation resulting in an understatement of the in-kind contribution and facilities usage expense. Criteria or specific requirement: GAAP requires nonfinancial (or in-kind) contributions to be recorded at the fair market value as revenues and expenses that do not result from cash receipts and cash payments. In addition, internal control procedures should be sufficiently effective to allow management or employees to prevent or detect and correct misstatements on a timely basis.Effect: In-kind contributions and related facilities usage expense were understated by the same amount. Cause: The manual spreadsheet goes through multiple versions and reviews prior to being finalized. However, the review process did not include a step to check that totals on the final version are properly calculated. Recommendation: On the final version of the spreadsheet that manually calculates fair value estimates of in-kind contributions, management should perform a standardized review and approval process of the spreadsheet that includes a step to check that totals are properly calculated. Any differences should be corrected by the preparer of the spreadsheet with corrections verified by the reviewer.