FAC Explorer

Audit 33790

FY End
2022-09-30
Total Expended
$67.93M
Findings
4
Programs
2
Organization: Civil Air Patrol (AL)
Year: 2022 Accepted: 2023-04-24
Auditor: Warren Averett

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
31343 2022-001 Significant Deficiency - F
31344 2022-002 Significant Deficiency - P
607785 2022-001 Significant Deficiency - F
607786 2022-002 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
12.840 Civil Air Patrol Program $67.80M Yes 2
14.218 Community Development Block Grants/entitlement Grants $123,857 - 0

Contacts

Name Title Type
HFM2BAAM8Q54 Stacy Jackson Auditee
3349539142 Rick Blanton Auditor
No contacts on file

Notes to SEFA

Title: Indirect Cost Rates Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Civil Air Patrol (CAP) and is presented on the accrual basis of accounting. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when the related liability is incurred. The information in the Schedule is presented in accordance with the provisions of the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some of the amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Civil Air Patrol did not elect to charge a de minimis cost rate of 10% for federal awards.
Title: Reporting Entity Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Civil Air Patrol (CAP) and is presented on the accrual basis of accounting. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when the related liability is incurred. The information in the Schedule is presented in accordance with the provisions of the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some of the amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Civil Air Patrols reporting entity is fully described in Note 1 to the consolidated financial statements. The financial reporting entity includes the National Headquarters and the Regions, Wings and Units below Wing level.
Title: Subrecipients Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Civil Air Patrol (CAP) and is presented on the accrual basis of accounting. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when the related liability is incurred. The information in the Schedule is presented in accordance with the provisions of the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some of the amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Civil Air Patrol did not provide federal awards to any subrecipients during the year ended September 30, 2022.
Title: Program Income Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal grant activity of Civil Air Patrol (CAP) and is presented on the accrual basis of accounting. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when the related liability is incurred. The information in the Schedule is presented in accordance with the provisions of the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some of the amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. In accordance with the terms of the Cooperative Agreement with the United States Air Force, $2,214,437 in program income earned during 2022 was added to funding committed by the Government and was used by Civil Air Patrol to further eligible program objectives.

Finding Details

Finding 2022-001
Finding 2022-001 ? Equipment Management (Significant Deficiency) Criteria/Condition: Civil Air Patrol?s (CAP) equipment management system includes the Operational Resource Management System (ORMS), Navision (listing of depreciable assets) and an Access database, which tracks items that have not been placed in service. Navision and ORMS were not accurately updated for current year activity. Cause/Effect: Inaccurate information was used to update several current year disposals and acquisitions in ORMS and Navision. This resulted in discrepancies in and between the systems, though between the two, all required information was included. Recommendation: The contents of each component of CAP?s equipment management system should be reviewed for accuracy. Any items that are not deemed a ?trackable asset? should be purged from the system to make the contents more manageable and meaningful. All additions to the system should be reviewed for accuracy by someone other than the preparer. Internal system controls that prevent an addition without the full complement of required information should be considered. Comparative reports between the system should be included in the quarterly reconciliation process. These reports should be run before and after the reconciliation process to ensure the identified activity was posted correctly.
Finding 2022-002
Criteria/Condition: CAP?s consolidated financial statements include CAP National Headquarters (NHQ), CAP Wings and Regions (Wings) as well as the CAP Foundation. These components are consolidated into the financial statements through various manually updated excel workbooks and consolidating entries. Wing Financial Analysts (WFA) are assigned from eight to twelve Wings. The Wing consolidation is performed by each WFA manually combining their assigned Wings? QuickBooks accounting history for the year in an excel workbook. These WFA workbooks are then manually combined into the Wing consolidated workbook. The WFA workbooks were not accurately updated. Cause/Effect: The Wing consolidation is a manual process which, by nature is prone to error. As a result, several discrepancies related to fixed assets, accounts payable, other liabilities, contribution revenue and net assets released from restrictions were noted in the WFA workbooks. These items were subsequently corrected by management. Recommendation: We recommend CAP evaluate current policies and procedures to ensure that the WFA workbooks and Wing consolidation are accurate and free from discrepancy. This process should include a review of the WFA workbooks by someone other than the preparer as well as an overall review of the Wing consolidated workbook. Once items are set for review, they should be locked down to prevent any unapproved changes. To facilitate this review process, CAP should consider creating a standardized review checklist. This checklist would not only assist in the review, but also document the reviewer as well as the date of the review.
Finding 2022-001
Finding 2022-001 ? Equipment Management (Significant Deficiency) Criteria/Condition: Civil Air Patrol?s (CAP) equipment management system includes the Operational Resource Management System (ORMS), Navision (listing of depreciable assets) and an Access database, which tracks items that have not been placed in service. Navision and ORMS were not accurately updated for current year activity. Cause/Effect: Inaccurate information was used to update several current year disposals and acquisitions in ORMS and Navision. This resulted in discrepancies in and between the systems, though between the two, all required information was included. Recommendation: The contents of each component of CAP?s equipment management system should be reviewed for accuracy. Any items that are not deemed a ?trackable asset? should be purged from the system to make the contents more manageable and meaningful. All additions to the system should be reviewed for accuracy by someone other than the preparer. Internal system controls that prevent an addition without the full complement of required information should be considered. Comparative reports between the system should be included in the quarterly reconciliation process. These reports should be run before and after the reconciliation process to ensure the identified activity was posted correctly.
Finding 2022-002
Criteria/Condition: CAP?s consolidated financial statements include CAP National Headquarters (NHQ), CAP Wings and Regions (Wings) as well as the CAP Foundation. These components are consolidated into the financial statements through various manually updated excel workbooks and consolidating entries. Wing Financial Analysts (WFA) are assigned from eight to twelve Wings. The Wing consolidation is performed by each WFA manually combining their assigned Wings? QuickBooks accounting history for the year in an excel workbook. These WFA workbooks are then manually combined into the Wing consolidated workbook. The WFA workbooks were not accurately updated. Cause/Effect: The Wing consolidation is a manual process which, by nature is prone to error. As a result, several discrepancies related to fixed assets, accounts payable, other liabilities, contribution revenue and net assets released from restrictions were noted in the WFA workbooks. These items were subsequently corrected by management. Recommendation: We recommend CAP evaluate current policies and procedures to ensure that the WFA workbooks and Wing consolidation are accurate and free from discrepancy. This process should include a review of the WFA workbooks by someone other than the preparer as well as an overall review of the Wing consolidated workbook. Once items are set for review, they should be locked down to prevent any unapproved changes. To facilitate this review process, CAP should consider creating a standardized review checklist. This checklist would not only assist in the review, but also document the reviewer as well as the date of the review.