Finding Text
2022-004 Allocation of Functional Expenses Criteria: Accounting standards require that not for profit organization present expenses by function and natural classification. Expenses that are directly attributable to a specific functional area of the Facility should be reported as expenses of those functional areas. Condition: The proper allocation of functional expenses is a management estimate that should be evaluated on a periodic basis. In particular, management should ensure that all program expenses are properly allocated to program costs and expenses that should be administration are similarly identified. Cause: New staffing within the Facility's finance department during 2022 contributed to inconsistencies in the allocation of functional expenses. Effect: The incorrect allocation of expenses between programs and administration may result in inaccurate preparation of grant vouchers. This impacts voucher submissions and revenue recognized for programs. Recommendation: We recommend that a detailed analysis be performed of the Facility?s expenses to ensure the allocation of functional expenses is consistent with the operations of the Facility. Views of Responsible Official and Planned Corrective Action: The Chief Executive Officer and Chief Financial Officer will ensure a detailed review is performed so that expenses are properly classified between program expenses and administrative expenses.