Finding 16550 (2022-002)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-08

AI Summary

  • Core Issue: ASTA's financial statements and SEFA did not include $74,567 in expenses for services performed in fiscal year 2022, leading to inaccuracies.
  • Impacted Requirements: The omission violates GAAP and Uniform Guidance by not properly accruing expenses and related revenues.
  • Recommended Follow-Up: Management should ensure all invoices received after year-end are reviewed and properly accrued for federal programs.

Finding Text

Criteria ASTA?s financial statements and Schedule of Expenditures of Federal Awards (SEFA) should be prepared on the accrual basis of accounting in accordance with generally accepted accounting principles (GAAP) and the Uniform Guidance, respectively. Condition ASTA?s financial statements and SEFA did not include some expenses paid after its fiscal year end that were for services performed during fiscal year 2022. Further, the corresponding revenue and receivables associated with the omitted federal expenditures were also not reflected in ASTA?s financial statements, and our major program selected for testing, the Market Access Program, was also impacted by the cutoff errors. Context We reviewed a sample of payments and receipts after year-end noting two instances where invoices were for services performed during fiscal year 2022, but that were not properly accrued at year-end, resulting in audit adjustments to both ASTA?s financial statements and SEFA. Our sample of the payments and receipts after year-end was not a statistically valid sample. Cause The COO does review invoices processed after year-end to determine if amounts paid represented charges for the previous fiscal year, however, during the 2022 fiscal year end financial close, the COO missed identifying and accruing the two invoices in question, which resulted in the error detected. Effect ASTA?s financial statements and SEFA was understated by $74,567 prior to being corrected as part of our audit procedures. Repeat Finding Yes, this is a repeat of findings 2021-002 and 2021-003. Questioned Costs None Recommendation We recommend that management review all invoices received after year-end for federal programs to ensure that all expenses are properly accrued, regardless of the method in which they are paid.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Action Management is implementing new policies and procedures to ensure all federal program expenses are captured in the correct accounting period and is exploring how to modify its accounting software to better track federal program expenses. Will also coordinate with key employees to identify any payments not submitted at fiscal yearend. Responsible Party and Implementation Date: Ann Jorss, Chief Operation Officer, is the responsible party for implementing the corrective action and has implemented the recommendations herein as of November 15, 2022.

Categories

Reporting

Other Findings in this Audit

  • 592992 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.601 Market Access Program $489,435
10.618 Agricultural Trade Promotion Program $221,790
10.600 Foreign Market Development Cooperator Program $158,206