Finding 2022-001 Delay in Financial Reporting Audit Finding: Management is responsible for providing timely and accurate financial information. The Center is required to submit the Data Collection Form and the reporting package to the Federal Audit Clearinghouse and the State Controller?s Office,...
Finding 2022-001 Delay in Financial Reporting Audit Finding: Management is responsible for providing timely and accurate financial information. The Center is required to submit the Data Collection Form and the reporting package to the Federal Audit Clearinghouse and the State Controller?s Office, which include the Basic Financial Statements of the Center within the earlier of 30 days after receipt of the auditor?s report, or nine months after the end of the audit period. The Center has experienced delays in the preparation and issuance of the year ended June 30, 2022 basic financial statements and its Single Audit required under Union Guidance. Corrective Action Plan: Due to AVHC's remote location, small size and FQHC status, we have found it extremely challenging to hire accounting staff with the required skills and knowledge to manage our unique organization, so we have successfully outsourced our accounting department for many years. However, when our former outsourced company sold to a large corporation, we began to experience a decline in services. Deadlines were not being met, yet costs were increasing 50% to 100%. In December 2022, a local FQHC began providing accounting services for us under a shared service agreement. Unfortunately, the FY22 audit was not complete at the time of the transition, and though we were under contract with the former consultant to complete the audit work, they were ultimately unable to complete the audit. Staff under the new agreement did not have access to critical historical data required to complete the last few outstanding items, increasing the amount of time to address them. Since FY22 audit work was not part of the new agreement, adequate staffing was not in place to manage the additional work. Management understands how important it is to meet the annual audit deadline. The plan for attaining and maintaining compliance consists of the following actions, many of which are in place: ? Review monthly processes to ensure workpapers are audit ready and that minimal adjustments are required after June financials have been issued. ? Manage staffing levels to ensure experienced staff are available to work with auditors during the annual audit period. ? Identify staff responsible for assisting with audit preparation and conduct regular training to ensure they can efficiently prepare requested documents and address auditor requests. ? Adhere to a pre-planned schedule with built-in time for unexpected delays. ? Begin planning for each audit six months prior to the end of the fiscal year: o Reach out to the selected auditor in January for an Engagement Letter, a PBC list, and to schedule fieldwork. o o Actively work with vendors to ensure all FY invoices are entered no later than the end of July so that a Trial Balance and other initially requested documents are provided to auditors no later than August 15. o o Staff assigned to assist with audit preparation are directed to prioritize audit work from July 1 until completion of audited financials. They will prioritize all requests from auditors, including document and sample requests and responding to questions. o o Any deviation from interim deadlines is to be communicated between accounting staff and auditors for resource planning on both sides. o o Weekly meetings will be scheduled between Management, accounting staff and audit staff at any point that the audit seems to be falling behind the planned schedule, to work through any issues as efficiently as possible. We are confident that full implementation of, and continuing attention to, these measures will ensure we complete future audits on time, beginning with FY23. Responsible Person: Christie MacVitie, CFO Expected Implementation Date: September 5, 2023