Finding Text
Condition: Prior to adjustments proposed and recorded in conjunction with the audit, Federal HRSA grant income was overstated during the year. Criteria: Federal HRSA grant income should be recognized at the time that grants are awarded to the Center. Cause: When HRSA funding was received during the year, the Center was properly relieving the receivable for Federal HRSA awards, but was also recording a second entry to recognize grant income and reduce net assets. Effect: Grant income is initially recorded at the time a Notice of Award is received; making an additional entry to record grant income when funding is received is duplicative and serves to overstate grant income. Identification of Repeat Findings: This finding is a new finding in the current year. Recommendation: Management should continue to recognize Federal HRSA grant income upon the Notice of Award and should continue to relieve the receivable in conjunction with funding; management should discontinue the second adjustment in conjunction with funding which serves to overstate grant income and decrease net assets. Views of Responsible Officials and Planned Corrective Actions: We concur with the recommendation. Starting in FY23 we are going to continue to recognize Federal HRSA grant income upon the Notice of Award and relieve the receivable each time a draw is taken. We will discontinue the adjustment which serves to overstate grant income and decrease net assets.