Audit 292598

2022-001 Ineffective Accounting Policies and Procedures Criteria: The Organization has submitted and is required to follow its Management Plan with the Texas Department of Agriculture. Condition: The Organization did not follow its Accounting Policies and Procedures as outlined in the Management Plan. In particular, the organization did not implement controls and processes to ensure the following: accounting records are maintained in accordance with generally accepted accounting principles; all bank account transactions are electronically pulled into a spreadsheet for review; thethe reconciled cash balances are compared to the general ledger balances. In addition, the Program Coordinator did not provide effective oversight to ensure these steps are followed and reviewed by a CPA, as was required in its Accounting Policies and Procedures. Cause: The Organization’s Program Coordinator, who is in charge of the accounting function, is not knowledgeable or experienced in accounting or in the use of the Organization’s accounting software. Effect: The Organization’s books and records were not kept in accordance with generally accepted accounting principles, its cash and related transactions were not recorded correctly in its accounting software, and the Organization’s books and records were therefore inaccurate. This caused the Organization to inappropriately report to its grantor agencies, use inaccurate information for purposes of assessing compliance with its budgets, and to miss its deadline for submission of its single audit. Recommendation: The Organization should employ or hire a knowledgeable and experienced accountant to maintain its books and records, and implement appropriate controls and accounting processes to ensure the accuracy of its financial statements and the timely filing of its reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization’s management agrees and plans to hire a skilled accountant to manage its books and records going forward.

2022-002 Single Audit Submission Criteria: The Organization’s single audit was due by July 31, 2023. Condition: The Organization’s single audit was not submitted by the due date. Cause: The Organization initiated the audit engagement with the auditor on June 19, 2023, which did not allow adequate time to complete the audit; in addition, the books and records were not in an organized or accurate manner, which required extensive additional procedures and adjustments to the accounts. Effect: The Organization was not able to timely provide its audited financial statements to its regulators and grantor agencies. As a result, the Texas Department of Agriculture has determined the Organization to be seriously deficient in the management of its programs, and has stated that if the Organization does not fully and permanently correct the deficiencies, it will terminate its agreement with the Organization.Recommendation: The Organization should employ or hire a knowledgeable and experienced accountant to maintain its books and records, and implement appropriate controls and accounting processes to ensure the accuracy of its financial statements and the timely filing of its reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The Program Coordinator fell ill during the time of the audit’s due date and was unable to effectively participate until having recovered later in the process. The Organization plans to hire a skilled accountant to manage its books and records going forward.

2022-001 Ineffective Accounting Policies and Procedures Criteria: The Organization has submitted and is required to follow its Management Plan with the Texas Department of Agriculture. Condition: The Organization did not follow its Accounting Policies and Procedures as outlined in the Management Plan. In particular, the organization did not implement controls and processes to ensure the following: accounting records are maintained in accordance with generally accepted accounting principles; all bank account transactions are electronically pulled into a spreadsheet for review; thethe reconciled cash balances are compared to the general ledger balances. In addition, the Program Coordinator did not provide effective oversight to ensure these steps are followed and reviewed by a CPA, as was required in its Accounting Policies and Procedures. Cause: The Organization’s Program Coordinator, who is in charge of the accounting function, is not knowledgeable or experienced in accounting or in the use of the Organization’s accounting software. Effect: The Organization’s books and records were not kept in accordance with generally accepted accounting principles, its cash and related transactions were not recorded correctly in its accounting software, and the Organization’s books and records were therefore inaccurate. This caused the Organization to inappropriately report to its grantor agencies, use inaccurate information for purposes of assessing compliance with its budgets, and to miss its deadline for submission of its single audit. Recommendation: The Organization should employ or hire a knowledgeable and experienced accountant to maintain its books and records, and implement appropriate controls and accounting processes to ensure the accuracy of its financial statements and the timely filing of its reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization’s management agrees and plans to hire a skilled accountant to manage its books and records going forward.

2022-002 Single Audit Submission Criteria: The Organization’s single audit was due by July 31, 2023. Condition: The Organization’s single audit was not submitted by the due date. Cause: The Organization initiated the audit engagement with the auditor on June 19, 2023, which did not allow adequate time to complete the audit; in addition, the books and records were not in an organized or accurate manner, which required extensive additional procedures and adjustments to the accounts. Effect: The Organization was not able to timely provide its audited financial statements to its regulators and grantor agencies. As a result, the Texas Department of Agriculture has determined the Organization to be seriously deficient in the management of its programs, and has stated that if the Organization does not fully and permanently correct the deficiencies, it will terminate its agreement with the Organization.Recommendation: The Organization should employ or hire a knowledgeable and experienced accountant to maintain its books and records, and implement appropriate controls and accounting processes to ensure the accuracy of its financial statements and the timely filing of its reporting requirements. Views of Responsible Officials and Planned Corrective Actions: The Program Coordinator fell ill during the time of the audit’s due date and was unable to effectively participate until having recovered later in the process. The Organization plans to hire a skilled accountant to manage its books and records going forward.