Audit 51004

Preparation of the Financial Statements, Schedule of Expenditures of Federal Awards and Material Audit Adjustments Material Weakness Criteria: Complete controls over financial reporting include the ability to prepare financial statements and accompanying notes to the financial statements and the schedule of expenditures of federal awards that are materially correct and include all required disclosures. Condition: As auditors, we were requested to draft the financial statements from data provided by CFA. The data included material misstatements which, if not corrected through audit adjustments, would have resulted in financial statements that were materially misstated. The data also contained an error considered to be a prior period adjustment that overstated current revenue by $129,408. Additionally, the schedule of expenditures of federal awards was completed by the auditors with data provided by CFA that was incorrect as a result of audit adjustments. Cause: CFA has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that CFA would not be able to draft the financial statements and schedule of expenditures of federal awards that are correct without assistance of auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that CFA is aware of this condition on financial reporting purposes. Management and the board of directors should continually be aware of the financial accounting and reporting of CFA and changes in the accounting and reporting requirements. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Education Education Innovation and Research CFDA #84.411C Activities Allowed Allowable Costs Period of Performance Material Weakness in Internal Control Criteria: A complete system of internal controls requires all expenditures to be properly approved and supported by appropriate documentation. In addition, all expenditures charged to the federal programs are required to be allowable costs under the program and allocated in accordance with CFA?s cost allocation plan. Condition: One out of 19 non-payroll expenditures tested lacked the required signature of the Director of Fiscal and Business Operations. Cause: Due to an oversight by CFA, the signatures of both the Director of Fiscal and Business Operations and the Manager of Business Operations were not present on the expenditure documentation. Effect: Improper expenses may be improperly approved. Questioned Costs: $0 Context/Sampling: A nonstatistical sample of 27 transactions out of 135 total transactions were selected for testing which accounted for $203,609 of $774,665 total federal program expenditures. Repeat Finding from Prior Year : No. Recommendation: We recommend CFA's management require both the Director of Fiscal and Business Operations and the Manager of Business Operations to review and approve all non-payroll expenditures. Views of Responsible Officials: Management agrees with the finding.

Preparation of the Financial Statements, Schedule of Expenditures of Federal Awards and Material Audit Adjustments Material Weakness Criteria: Complete controls over financial reporting include the ability to prepare financial statements and accompanying notes to the financial statements and the schedule of expenditures of federal awards that are materially correct and include all required disclosures. Condition: As auditors, we were requested to draft the financial statements from data provided by CFA. The data included material misstatements which, if not corrected through audit adjustments, would have resulted in financial statements that were materially misstated. The data also contained an error considered to be a prior period adjustment that overstated current revenue by $129,408. Additionally, the schedule of expenditures of federal awards was completed by the auditors with data provided by CFA that was incorrect as a result of audit adjustments. Cause: CFA has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that CFA would not be able to draft the financial statements and schedule of expenditures of federal awards that are correct without assistance of auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that CFA is aware of this condition on financial reporting purposes. Management and the board of directors should continually be aware of the financial accounting and reporting of CFA and changes in the accounting and reporting requirements. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Education Education Innovation and Research CFDA #84.411C Activities Allowed Allowable Costs Period of Performance Material Weakness in Internal Control Criteria: A complete system of internal controls requires all expenditures to be properly approved and supported by appropriate documentation. In addition, all expenditures charged to the federal programs are required to be allowable costs under the program and allocated in accordance with CFA?s cost allocation plan. Condition: One out of 19 non-payroll expenditures tested lacked the required signature of the Director of Fiscal and Business Operations. Cause: Due to an oversight by CFA, the signatures of both the Director of Fiscal and Business Operations and the Manager of Business Operations were not present on the expenditure documentation. Effect: Improper expenses may be improperly approved. Questioned Costs: $0 Context/Sampling: A nonstatistical sample of 27 transactions out of 135 total transactions were selected for testing which accounted for $203,609 of $774,665 total federal program expenditures. Repeat Finding from Prior Year : No. Recommendation: We recommend CFA's management require both the Director of Fiscal and Business Operations and the Manager of Business Operations to review and approve all non-payroll expenditures. Views of Responsible Officials: Management agrees with the finding.