Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.
Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.
Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.
Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.
Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.
Criteria: The Association is required by a US Department of Agriculture (USDA) loan agreement to fund a reserve account at the sum of $204 each month until a balance of $64,500 is achieved (see Note 4 to the financial statements).
Condition: The Association’s controls were not effective to ensure that the required reserve funding deposits were made during the year, per the terms of the loan agreement.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining the reserve account bank statements and bank reconciliation reports.
Cause: The Association had turnover in their finance director position and those remaining with the entity did not have familiarity with the terms of the loan agreement.
Effect: By not transferring the required amount of funds to the reserve account, they are not in compliance with the terms of their loan agreement.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that Association staff familiarize themselves with the terms of the loan agreement and put controls in place to ensure funds are properly transferred to the reserve account at least annually.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: The Association’s payroll liability accounts did not agree with the actual liabilities owed at year end and required material adjustments were made as part of the audit process.
Condition: The Association’s controls were not effective to ensure transactions recorded to payroll liability accounts were appropriate and balances were accurately stated at year end on the trial balance.
This internal control deficiency is considered to be a significant deficiency.
Context: Our procedures included examining payroll tax filings, payroll registers, and general ledger detail reports and comparing supporting documentation to account balances as of December 31, 2023.
Cause: The payroll software is not configured in a way that allows for proper mapping of payroll liability accruals to correct accounts. Additionally, no reconciliation is being performed on a regular basis to ensure liabilities are properly stated. Effect: By not reconciling payroll liabilities on a regular basis, the Association is not able to identify material misstatements in liability balances in a timely manner.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend the Association adopt controls to reconcile payroll liability balances at least quarterly.
View of Responsible Officials: There is no disagreement with this audit finding.
Criteria: Accounting principles generally accepted in the United States of America and applicable to not-for-profit entities require that amounts be recognized as revenues, with corresponding receivables if applicable, once barriers have been overcome that grantors or donors have applied to the conditional receipt of funds. Additionally, standards require that advanced payments of funds received, but which have barriers to unconditional receipt or a right of return to the grantor or donor if restrictions to their use aren’t met, be recognized as deferred revenue on the statements of financial position
Condition: The Association’s controls were not effective to ensure it was recognizing revenues, receivables, and deferred revenue for reimbursement-based programming in the same period the expenditure occurred.
This internal control deficiency is considered to be a significant deficiency.
Context: Procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2023 but were not. Additionally, we examined general ledger detail and grant agreements related to advanced funding received, but not yet expended, in determining whether or not a liability for unearned revenue existed.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement-based awards could be materially misstated.
Repeat finding: This finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: The Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement-based awards in the same period as their corresponding expenditures. Additionally, we recommend the Association establish controls to ensure that funds received from advance awards are recognized as revenue when earned.
View of responsible officials: There is no disagreement with this audit finding.
Criteria: Federal regulations award recipients to submit semi-annual and annual reports in accordance with
timelines defined in the award. Amounts reported are required to be complete, accurate and prepared in
accordance with the entity’s basis of accounting and be supported by financial statements and schedule of
expenditures of federal awards.
Condition: The Associations controls were not effective to ensure that reports were submitted timely and that
amounts reported were supported by adequate documentation.
• The December 31, 2023, final SF-425 for Contract #10CH01204403 was due April 30, 2024. A final report
was not provided; therefore we were unable to confirm if the report was filed in compliance with this
requirement.
• While the December 31, 2023, semi-annual SF-425 for Contract #10CH01204403 was submitted timely,
the Association was not able to provide documentation to support amounts reported.
• The final SF-425 for Contract #10HE00135801C5 was due October 30, 2023. While the report was
submitted timely, total expenses reported of $71,029 did not agree to final contract expenses per the
Association’s records of $70,477 (a difference of $552).
Questioned costs: None.
Context: Our procedures included testing four SF-429 (Real Property Status Reports) and four SF-425 (Federal
Financial Report) reports that were required as part of the grant contract provisions and federal reporting
requirements.
Cause: The Association experienced challenges in implementing a new financial reporting system in 2021 that
continued throughout the 2023 fiscal year. As a result, there was no reconciliation or support for amounts
reported.