Finding 32196 (2022-001)

B. Findings - Financial Statement Audit 2022-001 - Revenue Recognition Statement of Condition: During the year end closing process, HCPSS recorded inaccurate adjustments to revenue in the Restricted Programs Fund. Criteria: Internal controls over financial reporting should exist to ensure that material misstatements are prevented or detected and corrected by management in a timely manner. Cause: Management did not have a sufficient review process in place over the adjustments related to revenue in the Restricted Programs Fund. Effect: Management may produce interim or annual financial statements that are materially misstated. Recommendation: We have the following recommendation related to the internal control processes that impact revenue recognition in the Restricted Programs Fund: ? We recommend that HCPSS provide proper oversight and review of the recording and approval processes related to revenue recognition. HCPSS needs to ensure that they have multiple levels of resources that have a sufficient understanding of the laws, agreements, and accounting principles pertinent to the grants and similar programs associated with the fund. View of Responsible Officials Pertaining to 2022-001 HCPSS is in the process of reengineering its internal processes for the accounting of its Restricted Programs Fund. This includes two additional hires - a grant budget analyst and grant accountant - who will support the Restricted Programs Fund in providing enhanced oversight and compliance with generally accepted accounting principles throughout the year.