Finding Text
Section II – Financial Statement Findings
Finding 2024-001 – Controls over Financial Statement Preparation
Criteria
Management of the Organization is responsible for establishing and maintaining effective internal control
over financial reporting, including the full disclosure combined financial statements, in accordance with
U.S. generally accepted accounting principles (GAAP). The Organization is required to have proper
internal controls in place, specifically in regards to review and approval of accounts.
Condition
We have assisted the Organization in the preparation of the annual full disclosure combined financial
statements. Preparation of GAAP financial statements and note disclosures is a time-consuming activity
and requires an individual to remain current with all new reporting pronouncements issued by the
Financial Accounting Standards Board (FASB).
Context
We assisted the Organization’s staff in preparing adjustments to various account balances to present the
financial position and activities of the Organization in the annual audited combined financial statements
in accordance with GAAP. Journal entries were required for the following accounts: accounts payable and
accrued liabilities, prepaid expenses, contributions receivable, revenues, and expenses.
Effect
Management may not be able to detect material errors and omissions in its internal financial reports. As a
result, inaccurate financial data may be shared with outside users.
Cause
This finding was caused by weak internal controls over the financial reporting process. The Organization
relies on the auditor for expertise in financial reporting. The Organization’s internal controls did not
function properly to identify the errors and omissions described above.
Recommendation
We recommend that the Organization strengthen internal controls over financial reporting to ensure that
the financial statements are in accordance with GAAP.
Management Response
Management concurs with this finding. See corrective action plan.
Section III – Federal Award Findings and Questioned Costs
There were no federal award findings or questioned costs noted for the fiscal year ended June 30, 2024.