Finding 2025-002: Significant Deficiency in Financial Management System Affecting Federal Award Tracking and SEFA Preparation Recommendations: We recommend that management: 1. Implement a chart of accounts or coding structure that identifies funding source at the transaction level. 2. 3. 4. Establis...
Finding 2025-002: Significant Deficiency in Financial Management System Affecting Federal Award Tracking and SEFA Preparation Recommendations: We recommend that management: 1. Implement a chart of accounts or coding structure that identifies funding source at the transaction level. 2. 3. 4. Establish procedures to track expenditures by federal program throughout the year. Perform periodic reconciliations of grant activity to the general ledger. Develop and document a formal process for preparation and review of the Schedule of Expenditures of Federal Awards. Corrective Action Plan: Management Response already Completed prior to June 22nd, 2026: 1. A coding structure already exists in the ‘Grant’ field within SAGE accounting suite to identify what Grant source funding and/or expenses are applicable for. This is being enhanced to also include a “-…” identifying whether the grant is “- Direct Federal Funding”, “- Federal Passthrough Funding”, “- WA State Funding”, or “- Private Funding” for each grant. This will then be exported and dumped into a data table with mapping to sum total funding by general funding type source. 2. This is and has been in existence at FISH for a significant period of time. The Finance Director will be including a monthly review in the document ‘End of Month Finance Checklist’ to ensure that an Income Statement by Grant Type is reviewed monthly, in addition to the Detailed General Ledger review that also occurs monthly. Procedures to ensure that Federal funds are correctly identified by the correct Grant Type identifier as listed in #1 will be created so that this process becomes standardized moving forward. 3. See #2 above related to ‘End of Month Finance Checklist’ task. Management Response to be Completed: 1. The Finance Director, in coordination with the Executive Director, will develop and document a formal process for preparation and review of the Schedule of Expenditures of Federal Awards. Items 1-3 above will ensure that data is accurately tracked, while the procedures and processes created in this item will ensure that dates and reporting requirements are met ahead of time and in accordance with required standards. Anticipated Completion Date: • Full and complete implementation of all Corrective Action Plan items to be in place by 10/31/2026 and all relevant completed work for FY26-27 to be reviewed for adherence to all applicable policies, procedures, and/or standard practices as compared to Corrective Action Plan requirements and standards with any unavoidable, previously completed items of non-adherence being noted and brought to the attention of the (i) Executive Director and Finance Committee and/or (ii) the Board of Directors based upon scale of item of non-adherence. Responsible Individuals: • Work to be completed by Finance Office Manager with real-time and/or frequent periodical oversight by Finance Director and/or completed directly by Finance Director. • Summary of work completed and/or summary status reports to be reviewed and/or approved by Executive Director and/or Finance Committee based upon importance and/or applicability of work. • Financial Statements, Outstanding Audit Responses, and/or any outstanding items of note or organization-level scale to be reviewed by Board of Directors on at least a monthly basis.