Finding Text
Financial Statement Preparation
Information on the Federal Program: U.S. Department of the Agriculture, Plains Regional Transition to Organic Partnership Program Assistance Listing No. 10.163, Grant Agreement No. 23-NOPXX-NE-0004.
Criteria: SAS 115 requires communication, in writing, to management and those charged with governance, of material weaknesses identified in an audit.
Condition and context: The Association does not have an internal control system designed to provide for the preparation of the financial statements being audited, including the schedule of expenditures of federal awards and note disclosures.
Cause: The Association’s accounting personnel do not have the expertise to prepare the financial statements, including note disclosures and the schedule of expenditures of federal awards in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Effect or Potential Effect: The control deficiency is a material weakness that results in a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis.
Identification of a Repeat Finding: New finding.
Recommendation: The Association should continue to rely on the board for review of the financial statements, including note disclosures and the schedule of expenditures of federal awards. The Association may consider searching for a qualified volunteer to review the Association’s financial statements.
Responsible Official’s Response: The Association will continue to rely on its system of oversight provided by the board of directors in reviewing the financial statements of the Association. The Association will also be mindful of identifying a qualified volunteer or potential board member who could review the financial statements.