Finding Text
Timely Financial Statements and Audit-Material Weakness in Internal Control and Failure to Comply with State and Federal Requirements of Grants and Contracts.
Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b)
Prepare appropriate financial statements, including the schedule of Federal awards in accordance with
§200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation,
and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform
Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this
section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine
months after the end of the audit period.”
Condition: The delay in finalization of the audit report was directly related to circumstances experienced by the
prior audit firm. During this timeframe the audit firm lost two audit staff, one auditor with experience since 1986
retired and another left due to family matters. These personnel were key to the audit firm’s operations and thus far,
the audit firm has been unsuccessful in replacing these staff members. Further, a co-owner of the audit firm had
surgery, and the recuperative time has taken longer than expected. The co-owner was recently hospitalized again
for issues related to the surgery. The combination of these circumstances lead to the prior audit firm closing and
resigning it’s engagement. Subsequently the Southern Workforce Board, Inc. was required to begin procurement
procedures through it’s request for proposal process. The procurement process, selection of an audit firm and timing
of predecessor audit firm schedule directly impacted the completion of the audit.
Cause/Effect: Southern Workforce Board, Inc. is out of compliance with the reporting deadline for the audit.
Recommendation: Southern Workforce Board, Inc. financial records were finalized, complete, closed, reconciled
and available for audit in sufficient time to meet the audit submission requirements of Uniform Guidance. The late
submission was due to no fault of Southern Workforce Board, Inc. as they were prepared for the audit as they have
been consistently over the years.
Reply: See corrective action plan.