Finding Text
INTERNAL CONTROL OVER FINANCIAL REPORTING: REVENUE RECOGNITION – significant deficiency Promises to give, including those for donor restricted purposes, should be recorded in the fiscal year when unconditionally promised, rather than recorded in deferred revenue. During fiscal 2025, the Agency reporting monthly financial results on a modified cash basis, converting to GAAP basis at year end. The cutoff of revenue and receivables was not complete and certain promises to give had been recorded to equity or only partially recorded. None There were significant audit adjustments to revenue, net assets, and receivables GAAP revenue recognition policies and procedures (by revenue stream) have not yet been formally documented and requisite training held. Personnel who process and/or record billings and cash receipts should be trained and understand GAAP revenue recognition criteria, as well as controls over revenue cutoff to ensure completeness of revenues and support. Accounting policies and procedures should clarify that restricted promises to give (whether time restricted or purpose restricted) should be recorded when unconditionally promised. Conditional promises to give should be tracked and disclosed in the notes to the financial statements. The Corrective Action Plan has been developed by the Agency and included on page 30.