Finding Text
Condition: Generally accepted accounting principles require that deferred revenue be recorded for all amounts of grant
funds received that have not yet been earned.
Context: The improper recording of deferred revenues were identified during our audit work surrounding the revenue
recognition of the major program.
Effect: The adjustment to deferred revenues had the effect of increasing deferred revenues by $236,250 and decreasing
grant revenue by $236,250.
Recommendation: The Organization should review all grant agreements related to grant payments received and based
upon the terms of the agreement determine if deferral is appropriate.
Managements Response: We agree with finding, and will follow prescribed recommendation.