Finding 2023-002: Invalid Journal Entries
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. Adjustments were needed to reverse duplication of
amounts included in both accrued wages and accrued compensated absences payable. Entries were also
needed to clear negative expense allocations within funds. Several revenue and expense items were
duplicated in 2023 rather than being offset against the appropriate receivable or payable booked in 2022.
Entries were also required to book the December food program receivable and reverse the prior year
deferred revenue.
Cause: The Organization had an inexperienced fiscal officer during parts of 2022 and 2023. The 2022
audit adjustments were not posted correctly or adequately reviewed resulting in errors carrying forward to
2023. There was inadequate review of 2023 balances during the year-end close process.
Effect: The effect of these deficiencies in internal controls was a $162,519 overstatement of assets, a
$114,949 overstatement of liabilities, a $128,880 overstatement of revenue, a $81,310 overstatement of
expenses, and a $47,570 overstatement of net assets. These adjustments resulted in the reversal of $45,320
in payroll related costs charged against the major federal program. See finding 2023-001.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to providing the trial
balance for audit.
Finding 2023-004: Year-End Close and Review
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
the year-end close and review process. The Organization had difficulties providing an appropriate trial
balance for the current year. Upon receiving the trial balance, we noted errors related to negative expense
allocations, debit balances in payroll liabilities, and net assets not rolling forward from prior audit.
Cause: The Organization had an inexperienced fiscal officer during parts of 2022 and 2023. The 2022
audit adjustments were not posted correctly or adequately reviewed resulting in errors carrying forward to
2023. There was inadequate review of 2023 balances during the year-end close process.
Effect: The effect of these deficiencies in internal controls was a $46,810 overstatement of assets, a
$27,083 overstatement of liabilities, a $4,252 understatement of revenue, a $29,247 overstatement of
expenses, and a $19,727 overstatement of net assets.
Recommendation: We recommend the Organization obtain a better understanding of the accounting system
to allow for a thorough year-end close and review process. The year-end review should include reviewing
current balances compared to the prior year, reviewing grant drawdowns near year-end to ensure they are
recognized in the fiscal year the related costs were incurred, agreeing federal revenues earned to federal
expenditures for cost-reimbursable grants, and reviewing details of account balances, as necessary, prior to
providing the trial balance for audit.
Finding 2023-005: Accounts Payable Cutoff
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
cutoff of year-end accounts payable. Several items were included in year-end accounts payable based on
receiving quotes, purchase order, or signed contracts. No work was performed or goods transferred related
to these items so they did not meet the criteria for expense recognition under GAAP. Additionally, the
accounts payable balance could not be reconciled to the subsidiary accounts payable ledger.
Cause: Organization staff lacked understanding of when expense recognition is triggered under GAAP.
Effect: The effect of these deficiencies in internal controls was a $176,036 overstatement of revenue and a
$176,036 overstatement in expenses.
Recommendation: We recommend the Organization review the subsidiary accounts payable ledger and
reconcile to the general ledger balance. We also recommend that expenses be booked when incurred (work
is performed or goods are transferred).
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
capitalization. Several items over the $5,000 capitalization threshold that were related to new assets or
betterments rather than routine repair or maintenance were not capitalized.
Cause: The Organization received guidance to expense flood related repairs. However, it appears
purchases unrelated to flood damage were not tracked separately resulting in many fixed asset additions
being missed.
Effect: The effect of these deficiencies in internal controls was a $110,224 understatement in assets, a
$110,224 overstatement of expenses, and a $110,224 understatement of net assets.
Recommendation: We recommend the Organization review repair and maintenance accounts at year-end
for items above the $5,000 capitalization threshold that are not routine maintenance and make appropriate
adjustments as part of the year-end close process.
Finding 2023-001: Invalid Journal Entries (Compliance)
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. We identified several errors related to inaccurate
payroll accruals and negative payroll allocations within funds. This required the Organization to adjust
payroll costs based on accurate accruals and to eliminate negative payroll allocations within funds. These
adjustments resulted in a $45,320 reduction in payroll expenses charged to the major program.
Cause: There was inadequate review of 2023 balances during the year-end close process.
Effect and Questioned Costs: The effect of these deficiencies in internal controls was known questioned
costs of $45,320 charged to the major program. This resulted in over payment of federal funds to the
Organization in the amount of $45,320. The potential effect of these deficiencies is the misstatement of
federal expenditures reported on the Schedule of Expenditures of Federal Awards and the noncompliance
with Allowable Activities and Allowable Costs requirements per the Compliance Supplement.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to submitting
reimbursement requests for federal programs.
2023-003: Delinquent Audit Report
Condition and Criteria: The audit for the current year ended December 31, 2023 was not submitted to the
Federal Audit Clearinghouse within the statutory deadline of the earlier of nine months after the end of the
fiscal year or thirty days after the date of the auditors' report. Internal controls should be in place to provide
reasonable assurance that accounting records and information pertaining to the audit process are finalized
and made available to allow adequate time to complete the audit prior to the statutory deadline.
Cause: There is not a process in place to provide reasonable assurance that the accounting records and
information pertaining to the audit process are finalized and made available to the auditors to allow
adequate time to complete the audit and reporting prior to the statutory deadline.
Effect or Potential Effect: Submission of the audited financial statements and auditors' reports to the
Federal Audit Clearinghouse may be delinquent resulting in the Organization not qualifying as a low-risk
auditee and being subject to more stringent audit requirements.
Recommendation: We recommend the Organization implement procedures to ensure the accounting records
and information pertaining to the audit process are finalized and made available to the auditors to allow
adequate time to complete the audit prior to the statutory deadline.
Finding 2023-002: Invalid Journal Entries
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. Adjustments were needed to reverse duplication of
amounts included in both accrued wages and accrued compensated absences payable. Entries were also
needed to clear negative expense allocations within funds. Several revenue and expense items were
duplicated in 2023 rather than being offset against the appropriate receivable or payable booked in 2022.
Entries were also required to book the December food program receivable and reverse the prior year
deferred revenue.
Cause: The Organization had an inexperienced fiscal officer during parts of 2022 and 2023. The 2022
audit adjustments were not posted correctly or adequately reviewed resulting in errors carrying forward to
2023. There was inadequate review of 2023 balances during the year-end close process.
Effect: The effect of these deficiencies in internal controls was a $162,519 overstatement of assets, a
$114,949 overstatement of liabilities, a $128,880 overstatement of revenue, a $81,310 overstatement of
expenses, and a $47,570 overstatement of net assets. These adjustments resulted in the reversal of $45,320
in payroll related costs charged against the major federal program. See finding 2023-001.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to providing the trial
balance for audit.
Finding 2023-004: Year-End Close and Review
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
the year-end close and review process. The Organization had difficulties providing an appropriate trial
balance for the current year. Upon receiving the trial balance, we noted errors related to negative expense
allocations, debit balances in payroll liabilities, and net assets not rolling forward from prior audit.
Cause: The Organization had an inexperienced fiscal officer during parts of 2022 and 2023. The 2022
audit adjustments were not posted correctly or adequately reviewed resulting in errors carrying forward to
2023. There was inadequate review of 2023 balances during the year-end close process.
Effect: The effect of these deficiencies in internal controls was a $46,810 overstatement of assets, a
$27,083 overstatement of liabilities, a $4,252 understatement of revenue, a $29,247 overstatement of
expenses, and a $19,727 overstatement of net assets.
Recommendation: We recommend the Organization obtain a better understanding of the accounting system
to allow for a thorough year-end close and review process. The year-end review should include reviewing
current balances compared to the prior year, reviewing grant drawdowns near year-end to ensure they are
recognized in the fiscal year the related costs were incurred, agreeing federal revenues earned to federal
expenditures for cost-reimbursable grants, and reviewing details of account balances, as necessary, prior to
providing the trial balance for audit.
Finding 2023-005: Accounts Payable Cutoff
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
cutoff of year-end accounts payable. Several items were included in year-end accounts payable based on
receiving quotes, purchase order, or signed contracts. No work was performed or goods transferred related
to these items so they did not meet the criteria for expense recognition under GAAP. Additionally, the
accounts payable balance could not be reconciled to the subsidiary accounts payable ledger.
Cause: Organization staff lacked understanding of when expense recognition is triggered under GAAP.
Effect: The effect of these deficiencies in internal controls was a $176,036 overstatement of revenue and a
$176,036 overstatement in expenses.
Recommendation: We recommend the Organization review the subsidiary accounts payable ledger and
reconcile to the general ledger balance. We also recommend that expenses be booked when incurred (work
is performed or goods are transferred).
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
capitalization. Several items over the $5,000 capitalization threshold that were related to new assets or
betterments rather than routine repair or maintenance were not capitalized.
Cause: The Organization received guidance to expense flood related repairs. However, it appears
purchases unrelated to flood damage were not tracked separately resulting in many fixed asset additions
being missed.
Effect: The effect of these deficiencies in internal controls was a $110,224 understatement in assets, a
$110,224 overstatement of expenses, and a $110,224 understatement of net assets.
Recommendation: We recommend the Organization review repair and maintenance accounts at year-end
for items above the $5,000 capitalization threshold that are not routine maintenance and make appropriate
adjustments as part of the year-end close process.
Finding 2023-001: Invalid Journal Entries (Compliance)
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. We identified several errors related to inaccurate
payroll accruals and negative payroll allocations within funds. This required the Organization to adjust
payroll costs based on accurate accruals and to eliminate negative payroll allocations within funds. These
adjustments resulted in a $45,320 reduction in payroll expenses charged to the major program.
Cause: There was inadequate review of 2023 balances during the year-end close process.
Effect and Questioned Costs: The effect of these deficiencies in internal controls was known questioned
costs of $45,320 charged to the major program. This resulted in over payment of federal funds to the
Organization in the amount of $45,320. The potential effect of these deficiencies is the misstatement of
federal expenditures reported on the Schedule of Expenditures of Federal Awards and the noncompliance
with Allowable Activities and Allowable Costs requirements per the Compliance Supplement.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to submitting
reimbursement requests for federal programs.
2023-003: Delinquent Audit Report
Condition and Criteria: The audit for the current year ended December 31, 2023 was not submitted to the
Federal Audit Clearinghouse within the statutory deadline of the earlier of nine months after the end of the
fiscal year or thirty days after the date of the auditors' report. Internal controls should be in place to provide
reasonable assurance that accounting records and information pertaining to the audit process are finalized
and made available to allow adequate time to complete the audit prior to the statutory deadline.
Cause: There is not a process in place to provide reasonable assurance that the accounting records and
information pertaining to the audit process are finalized and made available to the auditors to allow
adequate time to complete the audit and reporting prior to the statutory deadline.
Effect or Potential Effect: Submission of the audited financial statements and auditors' reports to the
Federal Audit Clearinghouse may be delinquent resulting in the Organization not qualifying as a low-risk
auditee and being subject to more stringent audit requirements.
Recommendation: We recommend the Organization implement procedures to ensure the accounting records
and information pertaining to the audit process are finalized and made available to the auditors to allow
adequate time to complete the audit prior to the statutory deadline.