Finding 369477 (2022-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2024-02-15

AI Summary

  • Core Issue: Revenues were recorded in the wrong periods, violating grant conditions.
  • Impacted Requirements: Grant revenue must be recognized only when all conditions are met, leading to significant audit adjustments.
  • Recommended Follow-Up: Improve controls to ensure accurate timing of revenue recognition; aim for completion by January 31, 2024.

Finding Text

Criteria: Revenues were recorded in incorrect periods. Grant revenue should be recognized when all grant conditions are satisfied. Condition: Significant audit adjustments were made to correct the timing of revenue recognition based on the conditions stated in the grant agreements. Cause: The Organization does not have sufficient controls in place to prevent or detect errors in the timing of revenue recognition or recognition of liabilities related to grant funds received in advance. Effect: Multiple audit adjustments were identified and made. Recommendation: The Organization should further refine its existing processes so that the necessary accounting adjustments are made when needed. Grant revenue should be recognized in the appropriate period. Proposed Completion Date: January 31, 2024

Corrective Action Plan

Management accepts the recommendation. Corrective Action Taken: The organization has since implemented additional controls with its external accounting firm to increase the scope of work to add review of all grant invoices and financial tracking and reporting of all government grants in order to prevent and detect errors in the timing of revenue recognition or recognition of liabilities. The organization will implement an internal monthly review of all Profit and Loss statements with the external accounting firm in order to review and determine if any significant variances exist. Any large variances either from a prior financial tracking period or from projections will then be detected quickly. Given the additional systems in place and learnings from this year, we do not anticipate an issue with revenue recognition moving forward. Anticipated Completion Date: January 31, 2024

Categories

No categories assigned yet.

Other Findings in this Audit

  • 369478 2022-002
    Material Weakness
  • 369479 2022-001
    Material Weakness
  • 369480 2022-003
    Significant Deficiency
  • 369481 2022-001
    Material Weakness
  • 369482 2022-003
    Significant Deficiency
  • 945919 2022-001
    Material Weakness
  • 945920 2022-002
    Material Weakness
  • 945921 2022-001
    Material Weakness
  • 945922 2022-003
    Significant Deficiency
  • 945923 2022-001
    Material Weakness
  • 945924 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $271,540
93.268 Immunization Cooperative Agreements $196,657
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $180,000
97.024 Emergency Food and Shelter National Board Program $6,800