Finding Text
Criteria: Under 2 CFR 200.512(a), an auditee must submit the single audit reporting package, including financial statements and the schedule of expenditures of federal awards (SEFA), no later than 30 days after receipt of the auditor’s report or nine months after the fiscal year-end, whichever comes first. Company management is responsible for ensuring the financial statements are prepared and issued timely to meet the Single Audit submission deadline established by the Federal Audit Clearinghouse (FAC). Statement of Condition: The auditee’s single audit financial statements were not issued by the required due date. The fiscal year ended on December 31, 2020, making the reporting package due no later than September 30, 2021. However, the audit report date is February 13, 2026, resulting in the late submission of the single audit reporting package to the FAC. Additionally, the audit reports for the years ended December 31, 2021 to 2024 have not yet been issued. Cause of Condition: The delay occurred because of employee turnover and lack of adequate internal controls over financial reporting timelines. The auditee did not have sufficient processes in place to ensure the timely preparation and issuance of financial statements. Effect of Condition: Because the financial statements and reporting package were issued late the auditee failed to comply with federal reporting requirements, federal agencies and pass-through entities did not receive timely financial and compliance information needed for monitoring and oversight, and the delay increases the risk that financial reporting issues may go undetected or unresolved. Questioned Costs: None. Recommendation: We recommend that management (1) strengthen internal controls over year-end financial reporting to ensure timely completion of the audit, (2) implement a detailed closing schedule and tracking process to monitor deadlines, (3) ensure adequate staffing or external support during the financial statement preparation and audit process, and (4) conduct periodic reviews to confirm compliance with federal Single Audit submission deadlines. Identification of Repeat Finding: The finding is a repeat of the finding noted in the audit for December 31, 2019 as finding 2019-006. Views of Responsible Officials: Management understands and accepts the recommendation as outlined in the Corrective Action Plan.