Finding Text
Type of Finding:
Significant Deficiency in Internal Control over Financial Reporting
Condition: During testwork over accrued payroll accounts, CLA noted the year-end adjustments made
for accrued payroll and accrued vacation were erroneously calculated.
Criteria or specific requirement: Under generally accepted accounting principles, expenses should
be accrued the period in which they relate (hours worked in the case of accrued payroll and related
liabilities).
Effect: Understatement and overstatement of expenses and related liabilities.
Cause: The year-end entry was not reviewed for accuracy, resulting in accrued payroll being
understated and accrued vacation being overstated.
Repeat Finding: See prior year finding 2020-001.
Recommendation: CLA recommends management review the accrual entries in detail to ensure
accuracy prior to recording.
Views of responsible officials and planned corrective actions: VSS agrees with CLA in creating
internal controls over reviewing year end entries. We have hired an accountant, in addition to our
Finance Director and Finance Coordinator to create a system of posting and review. Federal Program Title(s):
ALN 16.575 - Crime Victim Assistance
Federal Agencies:
Department of Justice (ALN 16.575)
Pass-Through Agencies:
New Mexico Crime Victims Reparation Commission (ALN 16.575)
Award Numbers and Periods:
2021-VA-979 (10/1/2020-9/30/2021) (16.575)
2022-VA-180 (10/1/2021-9/30/2022) (16.575)
Type of Finding:
Material Weakness in Internal Control over Compliance
Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Per §200.313, Property records must be maintained that include a
description of the property, a serial number or other identification number, the source of funding for the
property (including the Federal Award Identification Number (FAIN)), who holds title, the acquisition
date, and cost of the property, percentage of Federal participation in the project costs for the Federal
award under which the property was acquired, the location, use and condition of the property, and any
ultimate disposition data including the date of disposal and sale price of the property.
Condition: During our testing, we noted that VSS internal controls were not sufficient or were not
operating as designed to meet the federal requirements.
Questioned costs: None. While VSS was not in compliance with the requirement for tracking and
monitoring the federally procured equipment, there were no unallowed costs on equipment purchases
made using federal funds. The material noncompliance relates to the context below, as there are no
controls in place to ensure compliance with tracking and monitoring requirements.
Context: The below issues were noted for both programs tested:
During our testwork we noted no physical inventory was taken during the fiscal year ended June
30, 2022.
The fixed asset listing does not contain the required information to properly identify purchases
with federal funds. VSS does not currently tag assets purchased with federal monies. As such, due to the limited
information present on invoices, we were not able to physically inspect all assets.
-VSS does not have controls in place to track purchases with federal funds on a spreadsheet or
similar.
Of the 3 assets tested during 2022, none of the listed asset purchases complied with federal
requirements.
Cause: Lack of established controls and procedures over allowable costs principals, federal
requirements for purchases using federal funds, and tracking of purchases made with federal funds.
Effect: Possible noncompliance with federal cost principals and monitoring of assets purchased using
federal funds.
Repeat Finding: 2021-002
Recommendation: We recommend that VSS reviews the current financial policies and procedures in
order to better serve the organization in documenting compliance with federal cost principals and
requirements.
Views of responsible officials: VSS agrees with CLA and has updated our policies over equipment
tracking and purchasing in FY 2023. We have created a tracking system and installed asset tags on all
equipment over our capitalization amount. A physical inventory will be conducted at the end of the fiscal
year to ensure equipment is accounted for and in use.