Audit 31968

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria or Specific Requirement: Catholic Charities West Virginia, Inc. internal controls must be able to prevent or detect a material misstatement in the financial statements. Internal controls are critical to ensure accurate financial reporting. Grants should only be considered conditional if both a barrier and right of return/release exist in the grant documentation. Condition: Catholic Charities West Virginia erroneously applied conditional contribution guidance to certain grants which did not meet the criteria for conditional contributions. This caused an overstatement of current year grant revenues and refundable advances, and an understatement of current year accounts receivable and net assets, along with a restatement of the prior year balances as described in Note 2 to the financial statements. Cause: Catholic Charities West Virginia did not have proper controls, policies or procedures in place related to the accounting for grants revenue. Effect: An adjusting entry was made for the following: Other Grant Revenue was decreased by $142,904, Refundable Advances was decreased by $224,140, Accounts Receivable was increased by $57,330, and Net Assets was increased by $424,374. The June 30, 2021 financial statements were restated as described in Note 2. Repeat Finding: Not a repeat finding Recommendation: We recommend that management review its policies and procedures surrounding grant revenue accounting to ensure amounts are recorded in the appropriate period in accordance with accounting principles generally accepted in the United States of America (GAAP). Views of Responsible Officials and Planned Corrective Action: Management agrees and has a plan to correct the finding.

Type of Finding: Material Weakness in Internal Control Over Financial Reporting Criteria or Specific Requirement: Catholic Charities West Virginia, Inc. internal controls must be able to prevent or detect a material misstatement in the financial statements. Internal controls are critical to ensure accurate financial reporting. Grants should only be considered conditional if both a barrier and right of return/release exist in the grant documentation. Condition: Catholic Charities West Virginia erroneously applied conditional contribution guidance to certain grants which did not meet the criteria for conditional contributions. This caused an overstatement of current year grant revenues and refundable advances, and an understatement of current year accounts receivable and net assets, along with a restatement of the prior year balances as described in Note 2 to the financial statements. Cause: Catholic Charities West Virginia did not have proper controls, policies or procedures in place related to the accounting for grants revenue. Effect: An adjusting entry was made for the following: Other Grant Revenue was decreased by $142,904, Refundable Advances was decreased by $224,140, Accounts Receivable was increased by $57,330, and Net Assets was increased by $424,374. The June 30, 2021 financial statements were restated as described in Note 2. Repeat Finding: Not a repeat finding Recommendation: We recommend that management review its policies and procedures surrounding grant revenue accounting to ensure amounts are recorded in the appropriate period in accordance with accounting principles generally accepted in the United States of America (GAAP). Views of Responsible Officials and Planned Corrective Action: Management agrees and has a plan to correct the finding.