Audit 356575

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.

Finding 2023-001: Material Weakness - Employee Fraud Condition and Context: During the audit, we became aware that a key and trusted employee devised a scheme to defraud the Association using their company issued corporate credit card for personal charges. The employee hid the scheme from the Association by submitting altered credit card statements. The altered credit card statements included deleting what appeared to be personal charges, altering dates, reference numbers, and vendor descriptions. In addition, the employee added fictitious charges to the statements submitted. The cost related to 2023 is approximately $230,000 of which $77,299 related to federal grants. Criteria: Management is responsible for the preparation of the financial statements and is responsible for the design, implementation, and maintenance of a system of controls that can prevent and detect a material misstatement whether due to fraud or error in timely manner. Cause: The deliberate manipulation of systems and documents by the employee perpetrating the fraud, as well as the lack of comprehensive reconciliation of credit card data by the third party accounting firm retained by the Association, meant that the fraud went undetected. Effect: This resulted in an overstatement of 2023 expenses for approximately $230,000 of which an adjustment was required to properly reflect expenses for the year ended December 31, 2023. Questioned Costs: $230,000 of which $77,299 relates to federal grants. Recommendation: We recommend the Association carefully review their internal control procedures as it related to credit card processing by having management review the original credit card statement and compare it to the statement submitted prior to approving payment. Management Response: Management has implemented the following measures to address the issue and prevent future occurrences:  Improved the segregation of duties between the approval, recording, and the booking of all expense transactions.  Automated the uploads of credit card transactions directly into the accounting system to prevent any manual manipulation and reconciled the transactions to the statements.  Updated the Association policies around vendor management and allowable/non allowable operating expenses.  We terminated the employee prior to discovering the fraud.

Finding 2023-002: Material Weaknesses - Proper Coding/Classification of Expenses Condition and Context: During the audit, we noted that several disbursements that should have been recorded as prepaid expenses were incorrectly coded to various expense line items including federal grants expenses and recorded in the current period. Criteria: Financial statements prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (GAAP), require expenses to be recognized in the period incurred/benefited. Cause: The Association recorded expenses in the wrong period. Effect: This resulted in an overstatement of expenses in the general ledger by $66,464 which included $24,362 related to federal grants plus $4,334 in related indirect costs. Questioned Costs: $66,464, of which $28,696 relates to federal grants. Recommendation: We recommend that the during the approval process, the Association carefully review their invoices to ensure that they are properly coded, and expenses are properly recognized in the period the expense was incurred. Management Response:  Updated the Association’s financial processes and guidelines around invoice approval.  Made better use of the AP/Invoice management system (bill.com) to ensure invoices are routed to the correct approvers and to the correct ledger accounts.  Simplified the chart of accounts to provide less scope for error.  Now preparing financial statements monthly, instead of quarterly and comparing variances against prior month and monthly budget, which will generate any anomalies.

Finding 2023-005: Material Weakness - Reporting - Late or No Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse Agency: Department of Justice ALN: 16.027, 16.526, 16.560, 16.582 Condition and Context: The Association did not submit their Single Audit Reporting Package for the year ended December 31, 2022, to the Federal Audit Clearinghouse. In addition, the Single Audit submission for the year ended December 31, 2021, was filed late. Criteria: The Association is required to adhere to reporting deadlines. The single audit submission to the Federal Audit Clearinghouse is due the earlier of nine months after fiscal year end or 30 days after the audit report is finalized. Cause: Due to lack of communication, coordination, and follow-up between the Association and their previous auditors, the single audit submission to the Federal Audit Clearinghouse was not filed on time for 2021 and not filed at all for 2022. Effect: This resulted in the single audit submission to the Federal Audit Clearinghouse being filed late or not at all. Questioned Costs: None noted. Recommendation: Appropriate written policies and procedures should be established to ensure timely filing of reports and the assignment of responsible personnel. Management Response:  We are producing a timetable and posting it to calendars of the filing dates of all key reports to the relevant authorities and are circulating it widely to all executives including the Board and Finance Committee.  This recommendation is also supported by the work undertaken on invoice approval, monthly review of financials and updates on the policy on Grants and Federal Awards.  We are also in the process of recruiting a new full-time Finance Director.