Finding 1215430 (2024-002)

Finding 2024-002, Transaction Support Condition: The Organization internal controls did not require all transactions to be properly documented and maintained. As a consequence, we noted the Organization was not readily able to document support for accounts receivable and investments holdings at October 31, 2024. In addition, the source and support for some revenue items selected for testing could not initially be explained or provided to the auditor to verify the reasonableness of the amount reported. Although once the Organization’s CEO became aware of the revenue testing issue she was able to identify the source documentation required to meet our audit requirements. Cause: There has been a high amount of turnover in the financial management side of the organization’s operation. Additionally, there were periods of time when accounting staff was not available because of a leave of absence. Other accounting staff tried to assist us in our request but due to the person’s limited time in the position it was difficult for them to identify the necessary support required. Effect: The Statements on Auditing Standards requires the independent auditor to review sufficient and adequate audit evidence in order to opine on the financial information. We were able to apply sufficient alternative procedures related to revenues selections. Additionally, we were able to have the Organization obtain subsequent documentation to verify the existence of the investment as of October 31, 2024. Result: It was difficult to obtain sufficient supporting documentation as required by auditing standards for all transactions subjected to audit verification.