Finding Text
Criteria: It is management's responsibility to provide financial information for audit that properly recognizes the following accrued liability accounts, in accordance with accounting principles generally accepted in the United States of America: Compensated absences Accrued payroll and payroll taxes 401k accrued liability Accrued expense subcontractor Condition: The accounting records were maintained using a QuickBooks (QB) general ledger accounting system and transitioned to Blackbaud NXT during the fiscal year. However, the liability accounts noted above were not updated, analyzed and reconciled at year end as required by generally accepted accounting principles for nonprofits using the accrual basis of accounting. Context: The accounting records were maintained using a QuickBooks (QB) general ledger accounting system and transitioned to Blackbaud NXT during the fiscal year. These account balances were corrected during the audit process. Effect: The effect was that the organization did not have controls and procedures in place to permit the normal analysis of the accrued liability accounts in accordance with generally accepted governmental accounting practices. The impact was that some account balances were not accurate and reliable and hindered the timely preparation of both internal and external financial reports. Cause: The cause, in the auditor’s judgment, was turnover of the financial management staff with adequate skill, knowledge and experience to maintain the organization’s general ledger accounting system, that did not allow the appropriate staff to reconcile the balances on a regular basis and prepare its annual financial statements. Recommendation: We recommend Eviction Defense Collaborative reconcile all assets, liability, and net asset accounts to support schedules and documentation each month. The Eviction Defense Collaborative has hired the professional service firm, Scrubbed.net, to assist with this process. Views of Responsible Officials and Corrective Actions: Eviction Defense Collaborative has retained a professional service firm, Scrubbed.net, to review and revise our accounting system to better conform to current accounting practices.