Audit 368460

Program: All programs Criteria or specific requirement: The Organization is required to have sufficient internal controls in place over the preparation of the Schedules, including accurately reflecting all state and federal funding received and ensuring that all necessary expenditures are reported. Condition: The Organization erroneously identified certain federal grants as state funded grants on the Schedules. Additionally, certain grant expenditures were originally omitted from the Schedules despite being recognized during the year. Cause: The Organization receives many grants annually, including grants which are made up of both state and federal funding sources. The Organization relied on the grantor provided contracts to determine the split between federal and state funding. This split appears to have changed during the reimbursement process, which was not communicated by the grantor to the Organization, and which the Organization could have confirmed before year end. Regarding the omitted expenditures, this is due to timing delays between when expenditures are recorded and when they are reported to funders. Effect: The Schedules did not accurately reflect the total state and federal funding for the year under audit, which led to adjustments being required to properly report the total state and federal funding for the year. Recommendation: We recommend that the Organization perform a thorough review of all funding received each year with a focus on any new funds received, to determine whether it is federal or state funded. This should occur prior to the finalization of the Schedules for the year. We also recommend that the Organization reconcile total expenditures to amounts reported on the Schedules each year to identify any discrepancies. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with the Condition and the Recommendation. See Corrective Action Plan.