Audit 409852

CONDITION: During 2025, we noted account reconciliations and approvals over financial information were not performed timely which resulted in a significant number of post-closing adjustments provided by management in order to report the consolidated financial statements in accordance with GAAP, including adjustments to properly record transactions between CHN and its affiliated entities. Procedures were not in place to ensure timely reconciliations and review of the general ledgers, journal entries, and reporting to third parties. CRITERIA: Systems and procedures should provide for reconciliation and review of general ledger accounts to occur on a timely basis to allow for accurate and timely preparation of financial and compliance reports.CAUSE: Systems and procedures were not in place to ensure general ledger accounts were reconciled and reports were filed timely to third parties.EFFECT: As adequate procedures were not in place to ensure timely reconciliation and review of general ledger accounts, there is a potential that financial reports, including the schedule of expenditures of federal awards, will be misstated and not filed accurately to third parties. RECOMMENDATION: Systems and procedures should be established by management to allow for timely reconciliation and review of general ledger accounts. Journal entries to record significant transactions in the general ledger should be reviewed and approved by management.

CONDITION: During 2025, corrections were made to the schedule of federal expenditures to properly reflect expenditures under the appropriate assistance listing numbers. Procedures were not adequate to ensure federal expenditures were properly reflected in the schedule of federal expenditures.CRITERIA: Systems and procedures should provide for identification of federal expenditures and the assistance listing numbers associated with those expenditures.CAUSE: Systems and procedures were not in place to ensure accurate reporting of assistance listing numbers on the schedule of federal expenditures.EFFECT: Due to improper identification of assistance listing numbers for federal expenditures, there is a potential for noncompliance with grant agreements and misstatement of financial reports, including the schedule of expenditures of federal awards. RECOMMENDATION: Systems and procedures should be established by management to allow for proper identification of assistance listing numbers on the schedule of federal expenditures and to ensure all compliance requirements of grant agreements are being met.