Finding 35365 (2022-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-02-05

AI Summary

  • Core Issue: Management is responsible for preparing financial statements and SEFA, but relies on auditors, which may lead to inaccuracies.
  • Impacted Requirements: This finding highlights a control deficiency that could cause significant misstatements in financial reporting.
  • Recommended Follow-Up: Management should carefully review the draft financial statements for accuracy and assess the risks involved in this approach.

Finding Text

#2022-001 FINDING: Financial Statement and Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Affected: CARES Act RLF, Assistance Listing #11.307. Compliance Requirement: Reporting. Questioned Costs: None. Condition and Cause: We were requested to draft the audited financial statements, related footnote disclosures, and SEFA as part of our regular audit services. Ultimately, it is management?s responsibility to provide for the preparation of the Organization?s statements, footnotes, and SEFA, and the responsibility of the auditor to determine the fairness of presentation of those statements. From a practical standpoint, we do both for you at the same time in connection with our audit. This is not unusual for us to do this with organizations of your size. Criteria and Effect: This control deficiency could result in a material misstatement to the financial statements that would not be prevented or detected by your Organization?s internal control system. Repeat Finding from Prior Year: Yes, prior year finding #2021-001. Recommendation: We have instructed management to review a draft of the auditor prepared financial statements in detail for their accuracy. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations. Views of Responsible Officials Corrective Action Plan: See Organization?s Corrective Action Plan

Corrective Action Plan

Finding No. 2022-001: Financial Statement and Schedule of Expenditures of Federal Awards (SEFA) Preparation Responsible Individuals: Fran White, Executive Director Corrective Action Plan: The Organization has accepted the risk associated with the finding regarding the preparation of the financial statements, and will continue to have the independent auditor prepare the annual financial statements. Anticipated Completion Date: Ongoing

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 611807 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
11.307 Economic Adjustment Assistance $1.09M