Audit 319681

Finding Type: Material Weakness in internal control over financial reporting and Material Weakness in internal control over compliance. Criteria and Condition: Revenue should be recorded in the period earned, and expenses should be recorded in the period incurred. During our audit, we identified revenue and expense transactions which were recorded as of the transaction date and not as of the date services were provided or expenses were incurred. As a result, the schedule of federal awards was misstated. Cause: Revenues and expenses were recorded based on invoice date rather than the date the service was provided or expenses were incurred. The Organization had not identified these items and recorded as accounts receivable and accounts payable. Effect: The financial statements were materially misstated, and journal entries were necessary to correct. Additionally, expenditures were not properly reported on the SEFA. Recommendation: We suggest the Organization record revenues and expenses based on the service or purchase date. This may include delaying the close of the fiscal year to ensure all revenue and expenses are recorded in the proper period. Views of Responsible Officials and Planned Corrective Actions: Revenues and expenses will be recorded based on the service or purchase date, rather than the date of the invoice.

Finding Type: Significant Deficiency in internal control over financial reporting and Significant Deficiency in internal control over compliance. Criteria and Condition: The Accounting Policies and Procedures Manual includes requirements for written approval by the Executive Director for expenses and items related to payroll. During our testing, it was determined these approvals were being given orally and not documented. Cause: Internal controls are not designed to provide authorization of transactions. When these authorizatiions are not documented, it is not possible to know if the transactions were properly authorized. Effect: Misstatements and improprieties could occur and not be detected. Recommendation: We suggest the Organiation provide written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual. Views of Responsible Officials and Planned Corrective Actions: We will begin providing written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual.

Finding Type: Material Weakness in internal control over financial reporting and Material Weakness in internal control over compliance. Criteria and Condition: Revenue should be recorded in the period earned, and expenses should be recorded in the period incurred. During our audit, we identified revenue and expense transactions which were recorded as of the transaction date and not as of the date services were provided or expenses were incurred. As a result, the schedule of federal awards was misstated. Cause: Revenues and expenses were recorded based on invoice date rather than the date the service was provided or expenses were incurred. The Organization had not identified these items and recorded as accounts receivable and accounts payable. Effect: The financial statements were materially misstated, and journal entries were necessary to correct. Additionally, expenditures were not properly reported on the SEFA. Recommendation: We suggest the Organization record revenues and expenses based on the service or purchase date. This may include delaying the close of the fiscal year to ensure all revenue and expenses are recorded in the proper period. Views of Responsible Officials and Planned Corrective Actions: Revenues and expenses will be recorded based on the service or purchase date, rather than the date of the invoice.

Finding Type: Significant Deficiency in internal control over financial reporting and Significant Deficiency in internal control over compliance. Criteria and Condition: The Accounting Policies and Procedures Manual includes requirements for written approval by the Executive Director for expenses and items related to payroll. During our testing, it was determined these approvals were being given orally and not documented. Cause: Internal controls are not designed to provide authorization of transactions. When these authorizatiions are not documented, it is not possible to know if the transactions were properly authorized. Effect: Misstatements and improprieties could occur and not be detected. Recommendation: We suggest the Organiation provide written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual. Views of Responsible Officials and Planned Corrective Actions: We will begin providing written documentation of authorizations and reviews as outlined in the Accounting Policies and Procedures Manual.