Criteria: The Organization should have internal controls in place to ensure that all transactions are recorded in the proper period with accounting principles generally accepted in the United States of America. Condition: The financial statements required several material adjustments to be in accordance with generally accepted accounting principles that were identified by audit procedures. Context: The Organization does not currently have a detailed review of the financial statements from an individual with a comprehensive knowledge of accounting principles generally accepted in the United States of America. Effect: There were several material adjustments to correct the financial statements. Recommendation: We recommend that the Organization thoroughly review the financial statements on a regular basis with a board member or other consultant that has advanced knowledge of accounting principles generally accepted in the United States of America. Responsible Official’s Response: Management agrees and will implement procedures to ensure that the financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Management will expand staff to include a contracted Chief Financial Officer that has an understanding of GAAP in order to provide the necessary amount of oversight such that monthly, quarterly, and annual financial reporting is in accordance with GAAP.
Criteria: The Organization should have internal controls in place to ensure that all amounts reported on grant reports tie back to the underlying amounts recorded in their financial statements. Condition: When comparing the grant reports filed for the Coronavirus State and Local Fiscal Recovery Funds grant to the amount recorded in the general ledger, it was determined that the Organization did not record certain expenses that were filed in the grant reports. This resulted in an adjustment being made on the financial statements. Context: The Organization does not currently have enhanced controls in place to ensure that amounts reported on grant reports reconcile back to the financial statements. Effect: There were adjustments made to correct the financial statements to agree to the grant report that was filed. Recommendation: We recommend that the Organization thoroughly review the financial statements when preparing grant reports to ensure that the amounts on both are in agreement. Responsible Official’s Response: Management agrees and will implement procedures to ensure that the financial statements and grant reports reconcile.