In 2022 two grant awards from private foundations were incorrectly classified as “without donor
restrictions” in the accounting system. Our Financial Policies and Procedures specify in Part I,
Section 6 that MIWSAC will recognize contributions based on any donor imposed purpose or
time restrictions ...
In 2022 two grant awards from private foundations were incorrectly classified as “without donor
restrictions” in the accounting system. Our Financial Policies and Procedures specify in Part I,
Section 6 that MIWSAC will recognize contributions based on any donor imposed purpose or
time restrictions identified in the award notice or grant document. Further, our Financial Policies
and Procedures specify in Part IV, Section 1 the following procedures be applied for all gifts,
contributions and grants:
1. Finance Manager and AIOA Controller will review award documents, grant documents
or other correspondence received from donor/funder to determine the type of donor
restriction(s).
2. Finance Manager and Executive Director will establish any required tracking of donor
restricted revenues and how/when restrictions will be satisfied and released.
3. The AIOA Controller will add new donor restricted revenues to the Net Assets
workpaper and subtract donor restricted funds that have been released from restriction.
4. The Finance Manager or AIOA Controller will prepare a journal entry as part of the
month-end procedures to reclass any new donor restricted revenue from Unrestricted Net
Assets to Net Assets with Donor Restriction and to record satisfaction of restrictions by
reclassing from Net Assets with Donor Restriction to Unrestricted Net Assets.
In the case of the two grants identified by the auditors as mis-classified, the policies were
followed but the conclusions reached were incorrect. In one case the error was a clear oversight
of the AIOA Controller. In the second case, the language the donor used in the grant document
for a general operations award was ambiguous and open to more than one interpretation. Our
AIOA Controller determined the award to have no restrictions but in a discussion with auditors
we have agreed the “2 year” language in the grant document, though not clearly defined, would
necessitate placing a time restriction on 50% of the award.
The corrections were made as part of the audit engagement by the AIOA Controller posting a
reclassing entry to revenue and net assets with donor restrictions. This audit adjustment was
reviewed and agreed upon by management.
Further corrective action will be for the AIOA Controller to consult with and collaborate with the
AIOA CFO on the determination of the revenue treatment of grants and contributions received
from private foundations to ascertain the existence of conditions and/or donor imposed
restrictions.
This corrective action has been implemented as of 8/25/2023.
Corrective Action contact/responsible party:
Jerry Frick, Fractional CFO – All In One Accounting
Jerry.frick@allinoneaccounting.com
651-347-4471
Corrective Action Contact:
Nicole Matthews, Executive Director
nmatthews@miwsac.org
651-646-4800