Finding 1092096 (2023-001)

CORRECTIVE ACTION NOT STARTED OR IN PROCESS Finding Number 2023-001: Federal Program: CFDA 14.181 – Section 811 Capital Advance Type: Financial Statement Statement of Condition: During the June 30, 2023 audit, accounting errors were detected. Transactions related to specific invoices recorded in the prior year were recorded again in the accounting system in the current year. Additionally, invoices previously paid were still included in accounts payable. Prior year audit entries were not recorded. Criteria: Accounting records not properly maintained. Effect: Inaccurate accounting results in misstated financial reports and incorrect surplus cash calculations. Cause: Reconciliations are not being effectively performed between the management agent and Project owner to ensure accounting records are accurate and updated. Additionally, journal entries, including entries resulting from the audit, are not always consistently recorded by the project. Reconciliations to the audited financial statements are not performed. Recommendation: Management needs to ensure accrual basis of accounting is maintained. Accounting records need to be reconciled between management agent and Project owner and to the audited financial statements to ensure all entries have been made and the financial records current and accurate. Track invoices to ensure they are correctly recorded in the financial statements and when paid, they are properly removed from the schedules. Management’s Response: Management concurs with the auditor’s finding that the Project’s accounting records should be maintained and reconciled between management agent and Project owner and the audited financial statement. Communications and reconciliations will begin immediately.