Finding Text
Finding 2022-001
U.S. Department of Health and Human Services
Programs: All
Significant Deficiency over Financial Reporting
Repeat Finding: No
Condition:
The Organization could not readily locate and provide supporting documentation for 2022 financial transactions.
Criteria:
Entities must maintain an adequate system of internal controls over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Entities must also maintain support for all financial transactions.
Cause:
The Organization experienced significant turnover in key management positions during fiscal year 2022. As a result, supporting documentation for financial transactions could not be located initially and were not readily available.
Effect:
Supporting documentation for financial transactions was not readily available for review which delayed the financial report process and the audit process, including late submission of the Single Audit.
Questioned Costs:
None.
Recommendation:
We recommend that the Organization ensure appropriate training, knowledge transfer, and succession planning within the organization to ensure that turnover in key management positions does not cause disruption to operations or financial reporting. We also recommend that the Organization review and update monthly and year-end financial reporting procedures and checklists as necessary, to assist in the preparation of financial records, and develop policies around document retention and storage to ensure supporting documentation can be readily located and accessed when needed.
Management’s Response and Corrective Action Plan
Management agrees with the finding. See schedule of corrective action.