FAC Explorer

Finding 11232 (2023-003)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-02-01
Audit: 15024
Organization: Rural Minnesota Cep, Inc. (MN)
Auditor: Bergankdv LTD

AI Summary

  • Core Issue: Lack of independent review and approval for journal entries by the Accounting Manager increases the risk of financial misstatements.
  • Impacted Requirements: Compliance with Allowable Costs/Cost Principles is compromised due to insufficient internal controls.
  • Recommended Follow-Up: Management should enhance internal controls by ensuring all journal entries are independently reviewed, approved, and supported by proper documentation.

Finding Text

Federal Program: Assistance listing number 93.558, Temporary Assistance for Needy Families: Formula Grant, United States Department of Health and Human Services, passed through various counties and Minnesota DEED. Compliance Requirement: Allowable Costs/Cost Principles. Significant Deficiency: As discussed at Finding 2023-002, we found no one independent reviews and approves the journal entries that are created and posted by the Accounting Manager. In addition, we noted the accounting software allows for one-sided journal entries to be posted. Financial statements could be misstated due to incorrect journal entries. We recommend management review its internal controls and implement procedures to ensure all entries are independently reviewed and approved and supported by adequate supporting documentation. Questioned Costs: The results of this noncompliance did not result in any questioned costs.

Corrective Action Plan

Federal Award Finding. Department of Health and Human Services, Temporary Assitance for Needy Families. Assistance listing number 93.558. Passed through various counties and Minnesota DEED. Significant Deficiency: See Finding 2023-002. Recommendation: That management review internal controls and implement procedures to ensure all entries are independently reviewed and approved and supported by adequate supporting documentation. Action Taken: We concur with the recommendation, and it was implemented immediately 1/22/2024. The Accounting Manager will no longer create and approve the same adjusting journal entry. When the Accounting Manager, Bill MacFarlane creates an adjusting journal entry, it will be approved by the IT Manager, Dave Schumacher, or the Executive Director, Tina Jaster. When Accounting Specialist, Angie Hanson, makes any adjusting journal entries, they will be approved by the Accounting Manager going forward.

Categories

Allowable Costs / Cost Principles Significant Deficiency

Other Findings in this Audit

  • 11233 2023-003
    Significant Deficiency
  • 11234 2023-003
    Significant Deficiency
  • 11235 2023-003
    Significant Deficiency
  • 11236 2023-003
    Significant Deficiency
  • 11237 2023-003
    Significant Deficiency
  • 11238 2023-003
    Significant Deficiency
  • 11239 2023-003
    Significant Deficiency
  • 587674 2023-003
    Significant Deficiency
  • 587675 2023-003
    Significant Deficiency
  • 587676 2023-003
    Significant Deficiency
  • 587677 2023-003
    Significant Deficiency
  • 587678 2023-003
    Significant Deficiency
  • 587679 2023-003
    Significant Deficiency
  • 587680 2023-003
    Significant Deficiency
  • 587681 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
17.278 Wia Dislocated Worker Formula Grants $196,337
17.258 Wia Adult Program $168,078
17.235 Senior Community Service Employment Program $119,445
93.558 Temporary Assistance for Needy Families $7,518
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $7,425
17.259 Wia Youth Activities $3,746