Finding 20376 (2022-004)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 19100
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The organization lacks a proper internal control system for preparing the Schedule of Expenditures of Federal Awards.
  • Impacted Requirements: Financial reporting standards are not being met, leading to potential inaccuracies in the Schedule.
  • Recommended Follow-up: Management should enhance awareness of financial reporting requirements and strengthen internal controls despite staffing limitations.

Finding Text

2022-004 Small Business Administration Financial Assistance Listing #59.008 COVID-19 Disaster Assistance Loans Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance ? Other Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the Schedule. The Schedule was not reviewed and required adjustments. Cause: The Organization had turnover and limited staffing available. Effect: There is a reasonable possibility that the Organization would not be able to draft the Schedule that is correct without the assistance of auditors. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year(s): No Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

2022 ? 004 Material Weakness in Internal Control over Compliance with Preparation of Schedule of Expenditures of Federal Awards Condition: The Organization does not have an internal control system designed to provide for the preparation of the Schedule. The Schedule was not reviewed and required adjustments. Cause: The Organization had turnover and limited staffing available. Management?s Response and Corrective Action Plan: The organization was unprepared for the first time performing a single audit. Also, the information that was needed was issued later than optimal by the government for the reporting requirements. However, now that there is an understanding of the process, the schedule will be monitored monthly. The more consistent staffing will provide a better flow of communication with the approval process. The YTD schedules will be presented at quarterly Board Finance Committee meetings. Responsible Individuals: ? Accountability for understanding and management of the entire process ? Marcia Meyer, CEO ? Preparation of regular schedules during year ? Jennie Myers ? Preparation of quarterly schedule updates ? Jennie Myers ? Approval of quarterly schedules and presentation to Finance Committee ? Marcia Meyer (approval) and Jennie Myers ? Preparation of annual schedule in advance of the audit ? Jennie Myers ? Approval of annual schedule before submitting for audit ? Marcia Meyer Anticipated Completion Date: This will be implemented immediately and will be up to date by June 2023.

Categories

Reporting Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 20375 2022-003
    Material Weakness
  • 596817 2022-003
    Material Weakness
  • 596818 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
59.008 Disaster Assistance Loans $1.90M
59.075 Shuttered Venue Operators Grant Program $153,008
94.006 Americorps $60,023