Audit 3151

Criteria: In a small organization, the bookkeeper is typically in charge of maintaining the majority of the financial records, which increases the possibility of human error. According to Title 2 CFR § 200.303(a), the non-Federal entity must 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: There is insufficient oversight by Healthy Relationships California’s management to produce accurate and reliable financial records. Specifically, we noted that the financial records of Healthy Relationships California were not produced on an accrual basis, that no assets were capitalized, and that several transactions were not reported to the appropriate accounts. Cause: HRC put forth efforts to improve accounting process however it has not achieved effective controls in ensuring accurate financial reports are produced. Effect: Lack of management oversight increases the risk of inappropriate transactions being undetected. Board members may not be sufficiently knowledgeable about the operations to apply effective oversight.

Criteria: In a small organization, the bookkeeper is typically in charge of maintaining the majority of the financial records, which increases the possibility of human error. According to Title 2 CFR § 200.303(a), the non-Federal entity must 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: There is insufficient oversight by Healthy Relationships California’s management to produce accurate and reliable financial records. Specifically, we noted that the financial records of Healthy Relationships California were not produced on an accrual basis, that no assets were capitalized, and that several transactions were not reported to the appropriate accounts. Cause: HRC put forth efforts to improve accounting process however it has not achieved effective controls in ensuring accurate financial reports are produced. Effect: Lack of management oversight increases the risk of inappropriate transactions being undetected. Board members may not be sufficiently knowledgeable about the operations to apply effective oversight.