Finding 385057 (2023-002)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-03-26
Audit: 298150
Organization: Pillars, Inc. (WI)
Auditor: Kerberrose Sc

AI Summary

  • Core Issue: The Organization lacks sufficient accounting personnel with the necessary training, leading to material errors in financial reporting.
  • Impacted Requirements: Internal controls are not effectively ensuring compliance with GAAP, risking management's review of inaccurate financial information.
  • Recommended Follow-Up: Provide additional training for accounting staff and implement monthly account reconciliations to improve accuracy before the 2024 fiscal year-end.

Finding Text

Criteria: Internal control systems should include personnel with sufficient education, training and/or experience to record financial information in accordance with GAAP. Condition: During our audit, we identified and proposed fifteen journal entries to various general ledger accounts, which were approved and posted by management. Of the fifteen journal entries proposed and accepted by management, three were material to the financial statements as a whole. Cause: Due to the size of the Organization, limited number of accounting personnel, and turnover in key accounting personnel, the Organization missed adjustments in recording financial information in accordance with GAAP. Effect: The effect of improper accounting during the year is that management could be reviewing materially incorrect financial information. Recommendation: Recommendation The Organization should consider providing additional training to staff who records financial information. We also recommend the accounts be reconciled on a monthly basis. Management's Response: The Organization agrees with the finding. During the 2023 fiscal audit, there was turnover in the finance position which slowed the response to this finding. The Organization has engaged an external consultant other than its auditor, to modify before 2024’s fiscal year-end its policies and procedures around fixed asset management and capitalization to eliminate the need for one major material journal entry that has been handled by its auditors year after year. The Organization also will ensure that a monthly account reconciliation process is in place and adhered to by 2024 fiscal year-end.

Corrective Action Plan

The Organization agrees with the finding. It has engaged an external consultant other than its auditor, to modify before 2024’s fiscal year-end its policies and procedures. The external consultant has been working closely with the auditors to learn areas for improvement. The Organization also will ensure that a monthly account reconciliation process is in place and adhered to by 2024 fiscal year-end. Responsible Official: Lisa Strandberg Anticipated Completion Date: The Organization will be working to improve the financial process for the 2024 fiscal year audit.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 385053 2023-001
    Material Weakness Repeat
  • 385054 2023-001
    Material Weakness Repeat
  • 385055 2023-001
    Material Weakness Repeat
  • 385056 2023-001
    Material Weakness Repeat
  • 385058 2023-002
    Material Weakness Repeat
  • 385059 2023-002
    Material Weakness Repeat
  • 385060 2023-002
    Material Weakness Repeat
  • 961495 2023-001
    Material Weakness Repeat
  • 961496 2023-001
    Material Weakness Repeat
  • 961497 2023-001
    Material Weakness Repeat
  • 961498 2023-001
    Material Weakness Repeat
  • 961499 2023-002
    Material Weakness Repeat
  • 961500 2023-002
    Material Weakness Repeat
  • 961501 2023-002
    Material Weakness Repeat
  • 961502 2023-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.267 Continuum of Care Program $202,568
21.027 Coronavirus State and Local Fiscal Recovery Funds $174,350
93.150 Projects for Assistance in Transition From Homelessness (path) $108,895
14.231 Emergency Solutions Grant Program $97,196
97.024 Emergency Food and Shelter National Board Program $61,315
14.218 Community Development Block Grants/entitlement Grants $7,000