Core Issue: The organization failed to record all revenue and expenses for the Child and Adult Food Care Program, leading to incomplete financial statements.
Impacted Requirements: Financial statements must accurately reflect all organizational activities, which was not met due to insufficient accounting resources.
Recommended Follow-Up: Management should enhance bookkeeping and reconciliation processes to ensure accurate monthly recording of program activities.
Finding Text
Finding Number 2022-001 ? Federal Grantor ? U.S. Department of Agriculture ? Pass-Through Grantor ? State of Connecticut Department of Education ? Federal Program Name ? Child and Adult Food Care Program ? CFDA Number ? 10.558 ? Finding Type ? Material Weakness in Internal Control over Financial Reporting ? Criteria ? The financial statements should include all activity of the organization. ? Condition ? Not all of the revenue and expenses associated with the program were being recorded on the general ledger by the client and amounts were not readily determinable. ? Cause ? The organization is not devoting sufficient time and resources to accounting for the program. ? Effect ? Significant adjusting journal entries were required during the audit process to record the program activity on the statement of financial position and statement of activities at year-end in order for the financial statements and the schedule of federal awards to be fairly presented. ? Questioned Costs ? Not Applicable ? Repeat Finding ? No ? Recommendation ? Management needs to strengthen internal bookkeeping procedures and reconciliation processes related to the federal program. ? Views of Responsible Officials ? Management agrees with the finding. Actual revenue and expenses will be recorded each month in the general ledger and reconciled to the bank account.
Categories
Material WeaknessReportingInternal Control / Segregation of Duties