Finding Text
Criteria: Management is responsible for establishing and maintaining internal controls and for the fair presentation of the financial position, change in net assets, and disclosures in the financial statements, in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Condition: During our audit, we noted that although the Organization’s employees are capable of recording cash receipts and disbursements, there is not the expertise to convert year-end balances to accrual and to prepare the annual audited financial statements and the related disclosures in accordance with GAAP. Cause: The Organization’s employees do not have the training to prepare the financial statements and notes to the financial statements in accordance with GAAP. Effect: Consequently, during our audit we prepared the Organization’s financial statements. Although the auditors are preparing the financial statements and related footnotes and schedule of expenditures of federal and state awards, the Organization’s management thoroughly reviews them and accepts responsibility for their completeness and accuracy. Recommendation: We recommend that management continue to make this decision on a cost/benefit basis. Management’s Response: The Organization will continue to rely on the outside assistance of its auditors in this area because it is the most cost-effective solution.