Audit 370500

Type of Finding: Significant Deficiency (Internal Control over Financial Reporting) Condition: Material audit adjustments were necessary to present the Schedule of Expenditures of Federal Awards for the year ended December 31, 2024 in accordance with U.S. generally accepted accounting principles (GAAP) and the uniform guidance. The adjustments cumulatively increased 2024 total expenditures of federal awards by $1,450,803. Significant causes of the adjustments included failure to properly track federal funding grants throughout the year. Since Todmorden’s internal control policies and procedures did not prevent, or detect and correct, material findings of the Schedule of Expenditures of Federal Awards, we concluded there is a significant deficiency in Todmorden’s internal control over financial reporting. Criteria: Todmorden’s expenditures of federal awards are required to be recorded in the Schedule of Expenditures of Federal Awards in accordance with U.S. generally accepted accounting principles (GAAP) and the uniform guidance. Cause: As a first time recipient of large amount of federal funding, Todmorden is newly obligated to submit a Schedule of Expenditures of Federal Awards ( SEFA) for the year ended December 31, 2024. Consequently, the company did not have appropriate internal policies and procedures to appropriately identify and track federal spending throughout the year. Effect: We proposed several material adjustments during our audit of the December 31, 2024, Schedule of Expenditures of Federal Awards. Recommendation: Management should assess the adequacy of the design of its policies and procedures related to the preparation of the Schedule of Expenditures of Federal Awards and design appropriate controls as necessary to rectify inadequacies. Some of the specific areas that need to be addressed include the proper identification of the receipt of federal funding and tracking of the spending of such funds. Condition: Material audit adjustments were necessary to present the Schedule of Expenditures of Federal Awards for the year ended December 31, 2024 in accordance with U.S. generally accepted accounting principles (GAAP) and the uniform guidance. The adjustments cumulatively increased 2024 total expenditures of federal awards by $1,450,803. Significant causes of the adjustments included failure to properly track federal funding grants throughout the year. Since Todmorden’s internal control policies and procedures did not prevent, or detect and correct, material findings of the Schedule of Expenditures of Federal Awards, we concluded there is a significant deficiency in Todmorden’s internal control over financial reporting. Criteria: Todmorden’s expenditures of federal awards are required to be recorded in the Schedule of Expenditures of Federal Awards in accordance with U.S. generally accepted accounting principles (GAAP) and the uniform guidance. Cause: As a first time recipient of large amount of federal funding, Todmorden is newly obligated to submit a Schedule of Expenditures of Federal Awards ( SEFA) for the year ended December 31, 2024. Consequently, the company did not have appropriate internal policies and procedures to appropriately identify and track federal spending throughout the year. Effect: We proposed several material adjustments during our audit of the December 31, 2024, Schedule of Expenditures of Federal Awards. Recommendation: Management should assess the adequacy of the design of its policies and procedures related to the preparation of the Schedule of Expenditures of Federal Awards and design appropriate controls as necessary to rectify inadequacies. Some of the specific areas that need to be addressed include the proper identification of the receipt of federal funding and tracking of the spending of such funds.