Audit 403079

Condition – At the time of audit fieldwork, Project NOW, Inc. had not reconciled significant accounts such as grants receivable, accounts receivable, investments in partnerships, property and equipment, accounts payable, accrual accounts, long term debt and the corresponding revenue and expense accounts. In addition, Project NOW, Inc. did not properly record an acquisition of a business that occurred during the audit year. As a result, Wipfli, LLP proposed and management posted adjusting journal entries to the aforementioned accounts. Lastly, due to the lack of audit preparedness, the audit extended past the required nine-month deadline for submission. Due to Project NOW, Inc.’s lack of audit preparedness that led to a delinquent audit submission as well as the breakdown in internal controls surrounding reconciliation of accounts which led to multiple adjusting journal entries, a material weakness exists in Project NOW, Inc.’s internal controls over financial reporting. Criteria – Federal Regulation 2 CFR 200.302(4) requires that an organization have…Effective control over, and accountability for, all funds, property, and other assets. Cause – During the audit year, Project NOW, Inc. experienced turnover in its business office while preparing for the audit which contributed to the lack of adequate and timely closing procedures, account reconciliation's, and review processes. Effect – As a result of not reconciling and adjusting certain account balances, a material weakness exists in internal controls. Recommendation – We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled and adjusted appropriately which will lead to timely submission of the audited financial statements in the future. View of Responsible Officials – Management agrees with the assessment and has committed to a corrective action plan.

Condition: Project NOW, Inc.'s final SF-425 for the grant ended January 31, 2025 was submitted after the required due date. Criteria: 2 CFR Part 200 subsection 238 requires an organization to submit financial reports as required by the Federal Award. The Head Start award requires a final cumulative SF-425 report be submitted no later than 120 days after the close of the project period. Cause: During Project NOW, Inc. transition of a Finance Director, management at the time was not aware the final report had not been submitted. Effect: Grant reporting requirements for Project NOW, Inc. were not met within the required timeline. Recommendation: Project NOW, Inc. should have a method to track required filings to ensure that reports are filed within due dates imposed by funding sources. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.