FAC Explorer

Audit 304318

FY End
2023-06-30
Total Expended
$9.39M
Findings
2
Programs
9
Organization: Choanoke Area Development Associaion, Inc. (NC)
Year: 2023 Accepted: 2024-04-24
Auditor: Mpcompany LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
394321 2023-001 Significant Deficiency - B
970763 2023-001 Significant Deficiency - B

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.46M - 0
93.600 Head Start $343,154 Yes 0
93.568 Low-Income Home Energy Assistance $233,679 - 0
10.558 Child and Adult Care Food Program $222,751 - 0
81.042 Weatherization Assistance for Low-Income Persons $182,131 - 0
17.259 Wia Youth Activities $168,545 - 0
14.239 Home Investment Partnerships Program $134,870 - 0
93.569 Community Services Block Grant $105,573 - 0
97.024 Emergency Food and Shelter National Board Program $18,202 - 0

Contacts

Name Title Type
FADKNNULH8K9 Andre Row Auditee
2525394155 Michael Palazzo Auditor
No contacts on file

Notes to SEFA

Title: Outstanding Loans Accounting Policies: Expenditures reported on the Schedule are reported on the modified-cash basis of accounting. The modified-cash basis used by management differs in many respects from accounting principles generally accepted in the United States of America as: (a)the acquisition of property and equipment is shown as an expense, which means that depreciation expense is never shown as such, nor is there ever a gain or loss to recognize on the disposal of property and equipment during its estimated useful life. (b)this schedule does not recognize prepaid expenses; rather, payments made in advance are shown as expenses of the reporting period. (c)no accrual has been made for unpaid vacation time even though such time has vested; instead, the expense is recognized in the period the vacation time is actually used. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Choanoke Area Development Association of North Carolina, Incorporated has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance At June 30, 2023, there was an outstanding loan under the United States Department of Agriculture Rural Development for an amount of $142,245. Other than repayment of principal and interest, there was no continuing compliance requirement on this loan, and as such, is not reported on the Schedule
Title: Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the modified-cash basis of accounting. The modified-cash basis used by management differs in many respects from accounting principles generally accepted in the United States of America as: (a)the acquisition of property and equipment is shown as an expense, which means that depreciation expense is never shown as such, nor is there ever a gain or loss to recognize on the disposal of property and equipment during its estimated useful life. (b)this schedule does not recognize prepaid expenses; rather, payments made in advance are shown as expenses of the reporting period. (c)no accrual has been made for unpaid vacation time even though such time has vested; instead, the expense is recognized in the period the vacation time is actually used. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: Choanoke Area Development Association of North Carolina, Incorporated has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance Choanoke Area Development Association of North Carolina, Incorporated has not contracted or made awards to any subrecipients

Finding Details

Finding 2023-001
Type of Finding: Significant deficiency in internal control over financial reporting. Criteria: A system of internal control over financial reporting includes controls over recording revenues and expenditures within the appropriate fiscal period. Condition and Context: During the course of the audit, an overstatement of current year expenditures was identified. Questioned Costs: $58,384 Cause: The Association did not have a process in place for tracking services received during the fiscal year and invoiced after the fiscal year end in accordance with generally accepted accounting principles. Effect: There was an understatement of the Association’s net assets without donor restrictions as of the beginning of the audit period and an overstatement of the Association’s total expenditures at the end of the audit period. Recommendation: The Association should develop a process and control for oversight of invoices received after fiscal close for services received during the fiscal year. Responsible Official’s Response: The Choanoke Area Development Association did receive the invoice dated November 8, 2022. CADA did not expense the invoice in the proper fiscal year of the Association. This invoice came after the closing of the prior year. The Association closed for the June 30, 2022 fiscal year in October 12, 2022. The Association’s accounting department recognizes the importance of ensuring that expenses are in the proper actual Association’s fiscal year. Therefore, whenever this situation occurs, the accounting department will reopen the proper year and account properly those invoices in the corresponding year then re-close. CADA will notify/remind vendors to submit vendor invoices timely. CADA programmatic and accounting staff will examine all invoices in accordance with fiscal policy requirements to ensure authorized posting in correct fiscal year. The Executive Director and the Finance Director will provide training to staff on the changes to the Fiscal Policy emphasizing the requirement to ensure that invoices are reconciled in the correct fiscal year.
Finding 2023-001
Type of Finding: Significant deficiency in internal control over financial reporting. Criteria: A system of internal control over financial reporting includes controls over recording revenues and expenditures within the appropriate fiscal period. Condition and Context: During the course of the audit, an overstatement of current year expenditures was identified. Questioned Costs: $58,384 Cause: The Association did not have a process in place for tracking services received during the fiscal year and invoiced after the fiscal year end in accordance with generally accepted accounting principles. Effect: There was an understatement of the Association’s net assets without donor restrictions as of the beginning of the audit period and an overstatement of the Association’s total expenditures at the end of the audit period. Recommendation: The Association should develop a process and control for oversight of invoices received after fiscal close for services received during the fiscal year. Responsible Official’s Response: The Choanoke Area Development Association did receive the invoice dated November 8, 2022. CADA did not expense the invoice in the proper fiscal year of the Association. This invoice came after the closing of the prior year. The Association closed for the June 30, 2022 fiscal year in October 12, 2022. The Association’s accounting department recognizes the importance of ensuring that expenses are in the proper actual Association’s fiscal year. Therefore, whenever this situation occurs, the accounting department will reopen the proper year and account properly those invoices in the corresponding year then re-close. CADA will notify/remind vendors to submit vendor invoices timely. CADA programmatic and accounting staff will examine all invoices in accordance with fiscal policy requirements to ensure authorized posting in correct fiscal year. The Executive Director and the Finance Director will provide training to staff on the changes to the Fiscal Policy emphasizing the requirement to ensure that invoices are reconciled in the correct fiscal year.