Finding 1162984 (2023-003)

Material Weakness Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2025-11-25

Audit: 372580

Organization: SACRAMENTO ASIAN PACIFIC CHAMBER OF COMMERCE (CA)

Auditor: RICHARDSON & COMPANY LLP

AI Summary

Core Issue: The Chamber billed more to the City and County of Sacramento than what was supported by their accounting records for grant-funded projects.
Impacted Requirements: There should be a reconciliation of grant expenses to billed amounts, as per 2 CFR 200.400, ensuring proper documentation and consistency in accounting practices.
Recommended Follow-Up: The Chamber must record expenses accurately in the accounting system and include grant revenue and expense comparisons in year-end reconciliations.

Finding Text

Finding 2023-003: Material Weakness and Questioned Cost – Grant Claim Support Federal Grantor: U.S. Department of Treasury Passed-through: City and County of Sacramento Condition: The Chamber’s expenditure detail for the grant funded projects do not support the amounts billed to the City and County of Sacramento. The amounts billed were more than the general ledger detail supported. Criteria: A reconciliation of grant project expenses to the grant revenue billed should be performed. The supporting documentation of any reconciling items should be maintained with the grant bills. Also, 2 CFR 200.400 states that accounting practices of the entity be consistent with cost principals required under the CFR and support the accumulation of costs and provide adequate documentation to support costs charged to the Federal award. Cause: The Chamber billed costs to the grant that were not allocated in the accounting system to that grant and a reconciliation was not performed comparing the grant billings to the expense detail. Effect: The expenses billed to the grant may not be correct. Recommendation: The Chamber needs to ensure that expenses to be reimbursed by federal grant funds are recorded in the class code in the accounting system for that grant so that federal grant revenue in the accounting system match the expenses allocated to that grant. The Chamber needs to include in their year-end reconciliations a comparison of grant revenue and expense and ensure they match or can be reconciled. Views of Responsible Officials and Planned Corrective Action: The Chamber agrees with this finding and is in the process of implementing a system for improved grant tracking.

Corrective Action Plan

Finding: 2023-003: Material Weakness and Questioned Cost - Grant Claim Support Description of Finding: SacAsian’s accounting system design did not align grant billings with the general ledger’s underlying expenses, as only direct costs were coded to the grant and other allowable costs flowed to unrestricted. As a result, the ledger detail did not clearly demonstrate the grant claim support without additional reconciliation. Cause: A comprehensive system for allocating and documenting grant-related costs had not yet been implemented. Statement of Concurrence or Nonconcurrence: SacAsian agrees with the finding. Corrective Action: SacAsian understands and acknowledges the significance of this finding and the potential that it creates for documentation gaps. The Controller and Director of Finance have implemented an ERP system which allows for better cost reporting and reviews of the grant-related expenses for accuracy, reliability, and reconciliation. While the general ledger details do not align, SacAsian did provide full documentation to substantiate the expenses claimed in each billing. Moving forward, all expenditures that have been billed will be reconciled to the general ledger monthly by the Director of Finance, Controller, and external CFO firm to ensure that billings match to expenditure detail and have been correctly allocated. Responsible Party: Ryan Fong, Director of Finance, 916-446-7883, rfong@sacasiancc.org Karen Wood, Not-for-Profit CFO (Creating Answers LLC), 916-930-0777, kwood@creatinganswers.com Pat Fong Kushida, President & CEO, 916-446-7883, patfk@sacasiancc.org Projected Completion Date: October 2025

Other Findings in this Audit

1162978 2023-001

Material Weakness Repeat
1162979 2023-002

Material Weakness Repeat
1162980 2023-003

Material Weakness Repeat
1162981 2023-004

Material Weakness Repeat
1162982 2023-001

Material Weakness Repeat
1162983 2023-002

Material Weakness Repeat
1162985 2023-004

Material Weakness Repeat

Programs in Audit

ALN	Program Name	Expenditures
21.027	CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS	$1.54M