Finding 363 (2022-001)

Criteria and Condition: Internal controls over financial reporting should be designed and in place to prevent, detect, and correct material misstatement in the financial statements in a timely manner. The internal controls were unable to prevent, detect, and correct several material errors in the preparation of the financial statements as of and for the year ended June 30, 2022, in a timely manner. This resulted in resulted in numerous significant adjustments related to assets, liabilities, net assets, revenue, and expenditures. Cause: Existing internal controls over financial reporting require that management perform meaningful analysis of internal records and general ledger accounts on a regular basis. Management is not performing a meaningful analysis of internal records and the general ledger, which results in financial statements that contain a significant number of material errors. Questioned Costs: None Effect: A significant number of material audit adjustments were required to correct the financial statements as of and for the year ended June 30, 2022. Recommendations: We recommend that management develop formal policies and procedures to identify material misstatements, which should include performing meaningful analysis of internal records and general ledger accounts on a regular basis. This will allow management to timely identify unusual trends in internal records and general ledger accounts that could be indicative of errors that cause the Center’s financial statements to be misstated. Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve monitoring of the financial reporting process and to ensure meaningful analysis of financial records is occurring on a regular basis. Management has hired an experienced Chief Financial Officer for the finance department, has begun identifying areas of improvement within the finance department, and is in the process of implementing new procedures that will improve the accuracy and timeliness of financial reporting.