Finding Text
2024-009 Material Weakness – Grant Expenses Criteria and Condition: In order to stay in compliance with federal requirements for allowable activities/allowable costs, the Organization must have complete accounting records, follow approved budgets, and file required reporting forms in a timely and accurate manner. The Organization has not complied with this requirement, as grant expenses reported in general ledger did not agree to grant expenses reported on monthly FSRs. Context: General ledger expense accounts for the federal grant did not agree with, or were not reconciled to, amounts reported on the FSRs, resulting in differences of balances and classifications from what was reported. Cause: Changes in personnel and accounting software, along with not having a system of controls in place to track and reconcile federal expenditures per the general ledger and support to amounts reported on the FSRs to ensure accurate reporting of amounts and classification of expenses. Effect: Accounting records could not be reconciled to amounts and classifications reported on FSRs. The largest variance in total expenses reported was from payroll ($171,199), and of which $74,814 can be attributed to audit finding 2024-008 in which 3 months were billed using net pay versus gross pay. The remaining difference of $96,385 in payroll could not be identified, however the general ledger balances were higher than what was reported on the FSRs. The remaining FSR categories of supplies and materials, travel, staff development, and media/communications/public affairs could not be reconciled to the general ledger individually, but in total reconciled within $3,531. Recommendation: Establish a system of controls to review and reconcile FSR submissions to support and the general ledger prior to submission. Views of Responsible Officials and Planned Corrective Action: The chief finance officer will reconcile FSR submission to document support and the general ledger before submission.