SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing
Federal Department: Department of Labor
Assistance Listing #: 17.274
Material Weakness in Internal Controls and Noncompliance
Category of Finding – Procurement, Suspension, and Debarment
Criteria - Uniform Guidance and CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction.
Condition - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements.
Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services.
Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing.
Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: 2022-003
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing
Federal Department: Department of Labor
Assistance Listing #: 17.274
Material Weakness in Internal Controls and Noncompliance
Category of Finding – Procurement, Suspension, and Debarment
Criteria - Uniform Guidance and CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction.
Condition - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements.
Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services.
Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing.
Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: 2022-003
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
SECTION II – FINDINGS - FINANCIAL STATEMENTS AUDIT
2023-001 Lack of Segregation of Duties
Significant Deficiency
Criteria – A good system of internal control contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to completion.
Condition – Change Inc. has a lack of segregation of duties in the cash receipts process. One individual deposits the cash, enters the receipts in the accounting system, and prepares the bank reconciliation. For certain types of revenue, this also involves recorded the revenue in the accounting system.
Cause – Change Inc. has a missing step in the internal controls as designed. Change Inc. has another individual open the mail and prepare a listing of cash receipts received each day. However, no one ever compares this listing to the receipts recorded in the accounting system.
Effect – Change Inc. is exposed to an increased risk that misstatements (whether caused by error or fraud) may occur and not be prevented or detected by management on a timely basis.
Recommendation – We recommend management review and update their cash receipts process to add additional segregation of duties to the process. For example, by having another member of the accounting team (not the individual making the deposits and recording the information) reconcile the deposit listing and the accounting system on a regular basis.
Auditee's comments and response – Management is in agreement with this finding. Change Inc. will be performing a review of their accounting and financial policies and procedures that will include improvements as needed.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing
Federal Department: Department of Labor
Assistance Listing #: 17.274
Material Weakness in Internal Controls and Noncompliance
Category of Finding – Procurement, Suspension, and Debarment
Criteria - Uniform Guidance and CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction.
Condition - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements.
Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services.
Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing.
Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: 2022-003
2023-002: Lack of Documentation for Procurement, Suspension and Debarment Testing
Federal Department: Department of Labor
Assistance Listing #: 17.274
Material Weakness in Internal Controls and Noncompliance
Category of Finding – Procurement, Suspension, and Debarment
Criteria - Uniform Guidance and CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction.
Condition - There was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Context – It was communicated by management during audit fieldwork that there was no documentation maintained related to the search for price comparisons or suspension and debarment testing performed on vendors.
Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, therefore controls were not adequately designed to ensure compliance with all of these requirements.
Effect - Increased overall risk that Change Inc. is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services.
Recommendation - We recommend that management implement a process to perform price comparisons and suspension and debarment testing as required by their procurement policy, and that as part of this process they maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. This could include the use of standard forms and templates for purchase orders, contracts, cost/price analyses, bid evaluation, and suspension & debarment testing.
Auditee’s comments and response – Management is in agreement with this finding. Management is in the process of obtaining additional training and updating processes to comply with these requirements.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: 2022-003
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No
2023-003: Lack of Documentation for Review of Participant Files
Federal Departments: Corporation for National and Community Service
Assistance Listing #: 94.006
Federal Departments: Department of Labor
Assistance Listing #: 17.274
Internal Controls Significant Deficiency
Category of Finding – Eligibility
Criteria – Uniform Guidance requires that nonprofit organizations establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition – Personnel at Change Inc. were unable to produce documentation supporting the review of participant files for participant eligibility.
Cause – Change Inc. has an informal process around participant file review and did not properly maintain documentation.
Effect – A participant’s eligibility could be incorrectly determined and not be caught as a file review was not completed, or the review is not properly completed and no one would know since there was no documentation of the review or lack of review.
Recommendation – We recommend that management create written participant file review policies and procedures which include a requirement that the review process be documented when reviews are completed.
Auditee’s comments and response – Management is in agreement with this finding. Change Inc. is working to formalize this process by creating a written participant file review policy and procedure.
Responsible party for corrective action: Jill Johnson, Associate Director
Repeat Finding: No