Audit 298238

Finding 2023-001 – Inaccurate reporting of expenditures Criteria: The District receives assistance from the Department of Health and Human Services. The District requests draw down of grant monies based upon actual expenditures incurred. The District is required to maintain adequate internal controls over financial reporting in order to ensure expenditures are properly supported and reported within the correct grant period. Condition: During audit procedures we noted total reimbursements received exceeded expenditures. We consider this to be a significant deficiency. Questioned Costs: $6,239 Cause: Adjustments to various accounts were not timely recorded in the accounting software, therefore, the reports used in supporting the draw down of funds were inaccurately stated. Effect: Inaccurate financial reporting of expenditures resulted in the District’s reimbursement requests exceeding total program expenditures. Recommendations: We recommend that all adjustments are accounted for in the accounting software prior to submitting draw down requests. A reconciliation should be prepared on a regular basis. All unexpended funds should be returned to remain in compliance. View of Responsible Officials: The District’s fiscal manager terminated her position July of 2022 leaving the agency struggling with turnovers and not knowing what entries were allocated correctly. Payables were entered in the accounting software from purchase orders which caused the reports to be inaccurately stated in the amount of $6,239. The unexpended funds will be returned to the Department of Health and Human Services to remain in compliance.

Finding 2023-002 - Journal entries Criteria: The District is required to maintain a general ledger and to include adjusting journal entries as necessary on a timely basis, to prevent the combined financial statements from being materially misstated. Journal entries are to be made, when appropriate to adjust balances, including those relating to the federal and state grant assistance programs. Condition: During the audit several material journal entries were proposed. These entries would have a material effect on the combined financial statements if not proposed and recorded. We consider this to be a material weakness. Cause: Lack of accounting and bookkeeping regarding the District’s general ledger accounts cause the various journal entries to be proposed. These entries affected various combined balance sheet and expenditure accounts. Effect: The combined financial statements would have been materially misstated if these journal entries were not proposed and recorded. Recommendations: We recommend that the District implements procedures to review the general ledger more carefully, including combined balance sheet and expenditure accounts. This review should include reconciliations so that receivables and payables can be properly recorded on a timely basis. In addition, review of previous adjustments and current account balances should be considered. View of Responsible Officials: Prior leading into this audit, there were two sets of accounting records. The District had their own records separate from the Community Action Partnership of Mercer County. For the fiscal year 2023-2024, the District is now under the Community Action Partnership of Mercer County with one set of accounting records. The general ledger, balance sheet and expenditures are to be reviewed on a timely basis.

Finding 2023-003 - Uncollected receivables Criteria: The District receives assistance from the Department of Health and Human Services and the Commonwealth of Pennsylvania Department of Education. The District must submit a request for draw down of funds to be reimbursed for actual expenditures incurred. The District must request these funds within a certain period of time as each grant has a designated close out period. Condition: During audit procedures it was noted that there were receivables from the prior period were not collected. The funds were never drawn down for the expenditures incurred and because it is past the close out period, the District can no longer request draw down of these funds. We consider this to be a material weakness. Cause: Lack of accounting and bookkeeping regarding the District’s general ledger accounts caused the prior receivable balances to be overlooked. Prior balances were not timely reviewed and reconciled. Effect: The District will not receive the funds for expenditures incurred but will absorb the cost of these expenditures. The prior year receivables will be removed from the combined balance sheet accordingly. Recommendations: We recommend that the combined balance sheet accounts be reviewed regularly and on a timely basis, with adjustments made as necessary. When determined that receivables exist, the funds should be requested in a timely manner. View of Responsible Officials: There were previous receivables from the prior period that were not timely reviewed and overlooked due to an oversight and staff turnover. The Community Action Partnership of Mercer County does not foresee this happening again in the future now that the District is under the Community Action Partnership of Mercer County’s accounting software.

Finding 2023-001 – Inaccurate reporting of expenditures Criteria: The District receives assistance from the Department of Health and Human Services. The District requests draw down of grant monies based upon actual expenditures incurred. The District is required to maintain adequate internal controls over financial reporting in order to ensure expenditures are properly supported and reported within the correct grant period. Condition: During audit procedures we noted total reimbursements received exceeded expenditures. We consider this to be a significant deficiency. Questioned Costs: $6,239 Cause: Adjustments to various accounts were not timely recorded in the accounting software, therefore, the reports used in supporting the draw down of funds were inaccurately stated. Effect: Inaccurate financial reporting of expenditures resulted in the District’s reimbursement requests exceeding total program expenditures. Recommendations: We recommend that all adjustments are accounted for in the accounting software prior to submitting draw down requests. A reconciliation should be prepared on a regular basis. All unexpended funds should be returned to remain in compliance. View of Responsible Officials: The District’s fiscal manager terminated her position July of 2022 leaving the agency struggling with turnovers and not knowing what entries were allocated correctly. Payables were entered in the accounting software from purchase orders which caused the reports to be inaccurately stated in the amount of $6,239. The unexpended funds will be returned to the Department of Health and Human Services to remain in compliance.

Finding 2023-002 - Journal entries Criteria: The District is required to maintain a general ledger and to include adjusting journal entries as necessary on a timely basis, to prevent the combined financial statements from being materially misstated. Journal entries are to be made, when appropriate to adjust balances, including those relating to the federal and state grant assistance programs. Condition: During the audit several material journal entries were proposed. These entries would have a material effect on the combined financial statements if not proposed and recorded. We consider this to be a material weakness. Cause: Lack of accounting and bookkeeping regarding the District’s general ledger accounts cause the various journal entries to be proposed. These entries affected various combined balance sheet and expenditure accounts. Effect: The combined financial statements would have been materially misstated if these journal entries were not proposed and recorded. Recommendations: We recommend that the District implements procedures to review the general ledger more carefully, including combined balance sheet and expenditure accounts. This review should include reconciliations so that receivables and payables can be properly recorded on a timely basis. In addition, review of previous adjustments and current account balances should be considered. View of Responsible Officials: Prior leading into this audit, there were two sets of accounting records. The District had their own records separate from the Community Action Partnership of Mercer County. For the fiscal year 2023-2024, the District is now under the Community Action Partnership of Mercer County with one set of accounting records. The general ledger, balance sheet and expenditures are to be reviewed on a timely basis.

Finding 2023-003 - Uncollected receivables Criteria: The District receives assistance from the Department of Health and Human Services and the Commonwealth of Pennsylvania Department of Education. The District must submit a request for draw down of funds to be reimbursed for actual expenditures incurred. The District must request these funds within a certain period of time as each grant has a designated close out period. Condition: During audit procedures it was noted that there were receivables from the prior period were not collected. The funds were never drawn down for the expenditures incurred and because it is past the close out period, the District can no longer request draw down of these funds. We consider this to be a material weakness. Cause: Lack of accounting and bookkeeping regarding the District’s general ledger accounts caused the prior receivable balances to be overlooked. Prior balances were not timely reviewed and reconciled. Effect: The District will not receive the funds for expenditures incurred but will absorb the cost of these expenditures. The prior year receivables will be removed from the combined balance sheet accordingly. Recommendations: We recommend that the combined balance sheet accounts be reviewed regularly and on a timely basis, with adjustments made as necessary. When determined that receivables exist, the funds should be requested in a timely manner. View of Responsible Officials: There were previous receivables from the prior period that were not timely reviewed and overlooked due to an oversight and staff turnover. The Community Action Partnership of Mercer County does not foresee this happening again in the future now that the District is under the Community Action Partnership of Mercer County’s accounting software.