Finding Text
MAJOR GRANT PROGRAMS-MATERIAL WEAKNESS IN INTERNAL CONTROL Grantor: DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Name: Ryan White, Title I-IV, Part A Ryan White Part A, MAI CFDA #: 93.914 Condition: GBAPP, Inc. was unable to prepare financial statements, a schedule of federal awards and a schedule of state financial assistance that complied with Generally Accepted Accounting Principles (GAAP) and governmental professional standards on a timely basis. Significant adjustments, subsequent to year end, were required to conform the financial statements and schedules to professional standards in all material respects. Accordingly, the Federal Data Collection Form and the Connecticut EARS filings were not submitted timely. Questioned Costs: None Criteria: Professional Standards require that GBAPP, Inc. prepare a statement of financial position, statement of activities, statement of cash flows, schedule of federal awards, schedule of state financial assistance and comprehensive notes to the financial statements timely enough to submit them for financial statement and compliance audits to be completed by regulatory deadlines. Cause: These conditions appear to have been contributed to by a change in management personnel, a limited review of financial reporting and closing procedures performed by management and key grant personnel and the accumulation of continuing issues arising from the COVID-19 pandemic. Effect: Management did not have adequate information to report its net assets, changes in net assets and federal and state awards on a timely basis. Recommendation: Management should consider implementing additional policies and procedures relating to financial reporting and the financial statement closing process. Additionally, we recommend that GBAPP supplement its management and accounting personnel with additional personnel that have suitable skills, knowledge and experience in financial, governmental and grants management reporting. Although management did contract with such an individual, it was not early enough in the fiscal year to prevent internal control deficiencies. Management Response: Management has retained a new accounting clerk and a consulting CPA to perform these duties and is in the process of implementing additional policies and procedures.