Audit 372285

Finding Number: 2024-001 - Represents a material weakness in internal control over compliance and nonmaterial noncompliance with AIDS United's major federal program Repeat Finding: No Questioned Costs: None Major Program: AL#93.928 - Supporting Public Health Capacity Condition: During the audit, Wipfli LLP proposed several adjusting journal entries to properly record cash, investments, grants receivable, promises to give, funds held under agency agreements, grant revenue, and net assets which we deem to be material in relation to the financial statements. We noted that not all accounts were consistently reconciled on a timely basis and there is no indication that adjusting journal entries are consistently reviewed by someone other than the preparer. Since the internal controls of AIDS United did not detect and record the adjustments described above prior to the audit, a material weakness exists in AIDS United's internal controls over financial reporting and the preparation of the financial statements in accordance with accounting principles generally accepted in the United States (GAAP). Due to the issues described above, the audit was delayed and as a result the 2024 data collection form and reporting package was not submitted to the Federal Audit Clearinghouse in a timely manner. Criteria: Internal controls are effective if they are properly designed and implemented to prevent or detect account misstatements prior to the audit. The Report Submission that is codified in 2 CFR Part 200.512 requires the auditee must submit the applicable data elements of the data collection form to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Cause: The internal controls of the Organization were not effective in preventing or detecting and correcting the misstatements described above prior to the audit. The 2024 audit was not completed prior to the due date. Effect: As a result of the financial reporting matter identified in the condition paragraph, a material weakness exists in the Organization's internal controls over financial reporting. The Organization was also not in compliance with audit submission requirements, resulting in nonmaterial noncompliance. Recommendation: We recommend the Organization implement procedures, such as timely reconciling of accounts and review of all reconciliations and adjusting journal entries by someone other than the preparer, to provide sufficient internal control over financial reporting so all necessary transactions are recorded in accordance with GAAP. This will ensure timely completion of the audit and submission of the audit package to the Federal Audit Clearinghouse. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.