FAC Explorer

Finding 1019524 (2022-004)

Significant Deficiency Repeat Finding
Requirement
ABCEFGHIJLMN
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 312755
Organization: Plan International Inc. (NY)
Auditor: Pricewaterhousecoopers LLP

AI Summary

  • Core Issue: The foreign exchange translation methodology is not following accounting standards, leading to inaccuracies in financial records.
  • Impacted Requirements: The use of a spot rate from the second last working day of the prior month instead of the transaction date rate violates accounting policies.
  • Recommended Follow-Up: Implement daily updates for foreign exchange rates in the new ERP system or conduct annual reviews to ensure compliance and accuracy.

Finding Text

Ref 2022-004: Foreign exchange translation methodology (repeat of prior year finding 2021-005, 2020-006 and 2019-006) (significant deficiency)Criteria:Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. The rate of exchange used throughout any given month is the spot rate from the second last working day of the prior month. This is not therefore the `the rate of exchange ruling at the date of the transaction? in accordance with the Plan WW and Plan Inc. accounting policies as stated in the respective financial statements.Condition:For all transactions, the impact of exchange rates takes place in the following stages:At a transaction level1. Translation from document currency (i.e. currency of income / expense per invoice) to local currency at the time of initial recognition (Plan WW and Plan Inc.)2. Local currency to functional currency (Euro) (Plan WW and Plan Inc.)3. Translation to actual rate at date of settlement (Plan WW and Plan Inc.)4. Translation of outstanding amounts within the balance sheet at the period end rate (Plan WW and Plan Inc.)At the consolidation level5. Functional currency to reporting currency (USD) (Plan Inc. only)6. Translation of non-Euro NOs to reporting currency (Euro) (Plan WW only)We note the following:In FY22 management performed a retrospective analysis to assess the misstatement caused by using the incorrect foreign exchange rate. We have assessed this analysis and confirmed the completeness, inputs and mathematical accuracy thereof. We have confirmed there is an immaterial misstatement arising as a result of the effect of using the incorrect foreign exchange rates for income and expenditure.The monthly rate used for consolidation purposes is also the spot rate from the second to last day of the previous month and not an appropriate average rate as required and we have noted an immaterial misstatement relating to the translation of I&E into the reporting currency (USD).CauseThe rates used, as noted above, are a spot rate from the second to last day of the prior month, not a transaction date rate or suitable weighted average, or another alternative. The current system does not allow for the correct rate to be used.Whilst the treasury team were aware the rate used was from the previous month, there was not an awareness that this was not in accordance with the requirements of the accounting standards or that this could result in material differences.EffectForeign exchange translation methodology is currently not in accordance with accounting standards.There are differences within the Plan WW and Plan Inc. financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted.Recommendation:As management plan, design and configure the new ERP system consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan?s accounting policies.Alternatively, there should be an annual review at GH level to assess the likely difference and adjustments processed if material.Foreign exchange rates should be checked to ensure that the rates being used are appropriate. Areas of political unrest are more likely to see volatile foreign exchange rates, which should be monitored.Views of Responsible Officials and Management?s Corrective Action Plan:Views of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Categories

Reporting Significant Deficiency

Other Findings in this Audit

  • 443070 2022-004
    Significant Deficiency Repeat
  • 443071 2022-004
    Significant Deficiency Repeat
  • 443072 2022-004
    Significant Deficiency Repeat
  • 443073 2022-004
    Significant Deficiency Repeat
  • 443074 2022-004
    Significant Deficiency Repeat
  • 443075 2022-004
    Significant Deficiency Repeat
  • 443076 2022-004
    Significant Deficiency Repeat
  • 443077 2022-004
    Significant Deficiency Repeat
  • 443078 2022-004
    Significant Deficiency Repeat
  • 443079 2022-004
    Significant Deficiency Repeat
  • 443080 2022-004
    Significant Deficiency Repeat
  • 443081 2022-004
    Significant Deficiency Repeat
  • 443082 2022-004
    Significant Deficiency Repeat
  • 443083 2022-004
    Significant Deficiency Repeat
  • 443084 2022-004
    Significant Deficiency Repeat
  • 443085 2022-004
    Significant Deficiency Repeat
  • 443086 2022-004
    Significant Deficiency Repeat
  • 443087 2022-004
    Significant Deficiency Repeat
  • 443088 2022-004
    Significant Deficiency Repeat
  • 443089 2022-004
    Significant Deficiency Repeat
  • 443090 2022-004
    Significant Deficiency Repeat
  • 443091 2022-004
    Significant Deficiency Repeat
  • 443092 2022-007
    - Repeat
  • 443093 2022-004
    Significant Deficiency Repeat
  • 443094 2022-007
    - Repeat
  • 443095 2022-004
    Significant Deficiency Repeat
  • 443096 2022-004
    Significant Deficiency Repeat
  • 443097 2022-004
    Significant Deficiency Repeat
  • 443098 2022-004
    Significant Deficiency Repeat
  • 443099 2022-004
    Significant Deficiency Repeat
  • 1019512 2022-004
    Significant Deficiency Repeat
  • 1019513 2022-004
    Significant Deficiency Repeat
  • 1019514 2022-004
    Significant Deficiency Repeat
  • 1019515 2022-004
    Significant Deficiency Repeat
  • 1019516 2022-004
    Significant Deficiency Repeat
  • 1019517 2022-004
    Significant Deficiency Repeat
  • 1019518 2022-004
    Significant Deficiency Repeat
  • 1019519 2022-004
    Significant Deficiency Repeat
  • 1019520 2022-004
    Significant Deficiency Repeat
  • 1019521 2022-004
    Significant Deficiency Repeat
  • 1019522 2022-004
    Significant Deficiency Repeat
  • 1019523 2022-004
    Significant Deficiency Repeat
  • 1019525 2022-004
    Significant Deficiency Repeat
  • 1019526 2022-004
    Significant Deficiency Repeat
  • 1019527 2022-004
    Significant Deficiency Repeat
  • 1019528 2022-004
    Significant Deficiency Repeat
  • 1019529 2022-004
    Significant Deficiency Repeat
  • 1019530 2022-004
    Significant Deficiency Repeat
  • 1019531 2022-004
    Significant Deficiency Repeat
  • 1019532 2022-004
    Significant Deficiency Repeat
  • 1019533 2022-004
    Significant Deficiency Repeat
  • 1019534 2022-007
    - Repeat
  • 1019535 2022-004
    Significant Deficiency Repeat
  • 1019536 2022-007
    - Repeat
  • 1019537 2022-004
    Significant Deficiency Repeat
  • 1019538 2022-004
    Significant Deficiency Repeat
  • 1019539 2022-004
    Significant Deficiency Repeat
  • 1019540 2022-004
    Significant Deficiency Repeat
  • 1019541 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
10.608 Food for Education $735,856
17.401 International Labor Programs $296,414
98.001 Usaid Foreign Assistance for Programs Overseas $292,881
19.019 International Programs to Combat Human Trafficking $287,783
19.345 International Programs to Support Democracy, Human Rights and Labor $209,886
19.517 Overseas Refugee Assistance Programs for Africa $184,816