FAC Explorer

Finding 1079167 (2023-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-10-15
Audit: 324814
Organization: Martin University (IN)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: There is a material weakness in the internal controls over financial reporting, leading to potential misstatements in the financial statements.
  • Impacted Requirements: The University lacks a comprehensive control procedure to ensure financial statements are complete and accurate according to U.S. GAAP.
  • Recommended Follow-Up: Management should enhance review processes for financial statements, including regular checks by board members and management outside the finance department.

Finding Text

2023 – 001: Financial Statement Preparation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the University's internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Criteria or specific requirement: In an ideal control setting, the University would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, the board and management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP, including retaining supporting documentation and reconciliations. Effect: It is possible that a misstatement of the University's financial statements could occur and not be prevented or detected by the University's internal control. Cause: Due to change in management and turnover in office, the University’s controls were not able to detect the adjustments made as part of the audit. The University does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete, accurate, and supported by the University’s records. Repeat finding: Yes – 2022-001. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be thoroughly reviewed by members of the board and management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

Categories

Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 502718 2023-001
    Material Weakness Repeat
  • 502719 2023-002
    Material Weakness Repeat
  • 502720 2023-003
    Significant Deficiency Repeat
  • 502721 2023-004
    Significant Deficiency Repeat
  • 502722 2023-005
    Significant Deficiency Repeat
  • 502723 2023-006
    Significant Deficiency Repeat
  • 502724 2023-008
    Significant Deficiency Repeat
  • 502725 2023-001
    Material Weakness Repeat
  • 502726 2023-002
    Material Weakness Repeat
  • 502727 2023-003
    Significant Deficiency Repeat
  • 502728 2023-004
    Significant Deficiency Repeat
  • 502729 2023-005
    Significant Deficiency Repeat
  • 502730 2023-006
    Significant Deficiency Repeat
  • 502731 2023-008
    Significant Deficiency Repeat
  • 502732 2023-001
    Material Weakness Repeat
  • 502733 2023-002
    Material Weakness Repeat
  • 502734 2023-003
    Significant Deficiency Repeat
  • 502735 2023-004
    Significant Deficiency Repeat
  • 502736 2023-005
    Significant Deficiency Repeat
  • 502737 2023-006
    Significant Deficiency Repeat
  • 502738 2023-007
    Significant Deficiency Repeat
  • 502739 2023-008
    Significant Deficiency Repeat
  • 502740 2023-001
    Material Weakness Repeat
  • 502741 2023-002
    Material Weakness Repeat
  • 502742 2023-003
    Significant Deficiency Repeat
  • 502743 2023-004
    Significant Deficiency Repeat
  • 502744 2023-005
    Significant Deficiency Repeat
  • 502745 2023-006
    Significant Deficiency Repeat
  • 502746 2023-008
    Significant Deficiency Repeat
  • 1079160 2023-001
    Material Weakness Repeat
  • 1079161 2023-002
    Material Weakness Repeat
  • 1079162 2023-003
    Significant Deficiency Repeat
  • 1079163 2023-004
    Significant Deficiency Repeat
  • 1079164 2023-005
    Significant Deficiency Repeat
  • 1079165 2023-006
    Significant Deficiency Repeat
  • 1079166 2023-008
    Significant Deficiency Repeat
  • 1079168 2023-002
    Material Weakness Repeat
  • 1079169 2023-003
    Significant Deficiency Repeat
  • 1079170 2023-004
    Significant Deficiency Repeat
  • 1079171 2023-005
    Significant Deficiency Repeat
  • 1079172 2023-006
    Significant Deficiency Repeat
  • 1079173 2023-008
    Significant Deficiency Repeat
  • 1079174 2023-001
    Material Weakness Repeat
  • 1079175 2023-002
    Material Weakness Repeat
  • 1079176 2023-003
    Significant Deficiency Repeat
  • 1079177 2023-004
    Significant Deficiency Repeat
  • 1079178 2023-005
    Significant Deficiency Repeat
  • 1079179 2023-006
    Significant Deficiency Repeat
  • 1079180 2023-007
    Significant Deficiency Repeat
  • 1079181 2023-008
    Significant Deficiency Repeat
  • 1079182 2023-001
    Material Weakness Repeat
  • 1079183 2023-002
    Material Weakness Repeat
  • 1079184 2023-003
    Significant Deficiency Repeat
  • 1079185 2023-004
    Significant Deficiency Repeat
  • 1079186 2023-005
    Significant Deficiency Repeat
  • 1079187 2023-006
    Significant Deficiency Repeat
  • 1079188 2023-008
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $1.18M
84.063 Federal Pell Grant Program $482,460
84.007 Federal Supplemental Educational Opportunity Grants $25,631
84.033 Federal Work-Study Program $25,000