Finding 387813 (2023-001)

Criteria Management of the Organization is responsible for establishing and maintaining effective internal control over financial reporting, including the net assets with donor restrictions transaction classes. Condition During our testing of net assets, we noted weak internal controls for identifying and tracking additions and releases for net assets with donor restrictions. Context During our testing we noted the following issues:  We were unable to obtain a reconciliation between the manual net assets with donor restrictions schedule and the accounting system reporting.  We were unable to validate certain releases from restrictions as presented on the schedule. Effect Management may not be able to detect material errors and omissions in the net assets with donor restrictions schedule. As a result, incomplete or inaccurate financial data may be shared with outside users. Cause This finding was caused by weak internal controls and documentation related to net assets with donor restrictions. Recommendation We recommend that the Organization strengthen internal controls over net assets with donor restrictions. Management Response Management concurs with this finding. See corrective action plan