Finding 24215 (2022-001)

Significant Deficiency
Requirement
L
Questioned Costs
$1
Year
2022
Accepted
2023-03-30
Audit: 20813
Organization: Community Resource Center (CA)
Auditor: Ysr CPA Group PC

AI Summary

  • Issue: The Organization lacked proper controls to ensure accurate recording of federal grant revenue, leading to misstatements.
  • Impacted Requirements: Revenue should be recorded when earned, as per generally accepted accounting principles.
  • Recommended Follow-Up: Implement controls to ensure revenue is recognized correctly when federal expenditures are incurred.

Finding Text

Condition The Organization did not have controls properly implemented to ensure that federal grant revenue was recorded accurately. Criteria Generally accepted accounting principles requires revenues to be recorded when earned. Context Our audit procedures detected, misstatements to revenue related to Crime Victims Assistance for expenditures incurred in the prior period. The result was an understatement of revenue for cost-reimburseable expenditures in the prior fiscal year and an overstatement of revenue in the current fiscal year in the amount of $19,501. Effect Revenue was over stated in the current fiscal year and the auditor recorded adjustments to correct the error. Cause The Organization's internal controls over financial reporting did not ensure that revenue was recorded in the proper p Recommendation that revenue is recognized when federal expenditures under cost reimbursement contracta are reported when incurred. Management Response After further discussion with the auditor and grant program management, the Organization understands the justification underlying the finding identified, as the finding is required by nature of the fact that there were adjustments to the Organization?s financial statements made during, and as a result of, the audit. The Organization acknowledges this finding and understands the continued need to ensure proper reporting of financial statements, including the need to incorporate the adjustments made during this review.

Corrective Action Plan

The Organization has implemented a full review of the contracts at year end to make sure all expenses are assigned to a funder code in the accounting system. In additional, as a final control procedure, Accounting will run a final report for all contracts that have been identified as federal vs actual invoiced expenditures and further compared to what has been expensed per the financial statements and provide to the Chief Program Officer to compare and reconcile to the SEFA. 39

Categories

Questioned Costs Cash Management Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 24216 2022-002
    Significant Deficiency
  • 600657 2022-001
    Significant Deficiency
  • 600658 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.267 Continuum of Care Program $248,331
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $65,000
14.218 Community Development Block Grants/entitlement Grants $58,522
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $38,114
16.575 Crime Victim Assistance $27,998