Finding 392053 (2022-001)

Condition – During our audit, Wipfli, LLP identified several deficiencies related to Porchlight, Inc.'s internal control over financial reporting. Wipfli found the design of Porchlight, Inc.'s fiscal policies and procedures to be sufficient but the execution of the fiscal policies and procedures were lacking. The matters identified were as follows: Proper review and approval of reconciliation's in accordance with fiscal policies and procedures was not evident. Essentially all significant general ledger accounts were not reconciled in a timely manner throughout the year. Proper authorizations on some payroll and cash disbursement transactions was not evident. Financial reports were not reconciled to the general ledger Financial reports provided to the Board of Directors were not timely and did not provide an accurate presentation of Porchlight, Inc's financial results. Material adjustments to cash, promises to give and property and equipment were proposed by the auditor and recorded by management during the audit. The primary cause of these deficiencies was the resignation of the Finance Director during the year. Porchlight, Inc. did hire and outside contractor as well as additional finance team members to reconcile accounts in preparation of the financial audit. Based on the items noted above, a material weakness exists in Porchlight, Inc.’s internal control over financial reporting. Criteria – Internal controls need to be in place to assure effective control over, and accountability for all funds, property and other assets for all programs operated by Porchlight, Inc. Cause – During the audit year, there was turnover in Porchlight, Inc.’s business office which contributed to the lack of timely reconciliation's. In addition, the circumstances surrounding the COVID-19 pandemic continued to affect the timeliness of the reconciliation process. Porchlight, Inc. is working on streamlining and implementing processes to address the deficiencies noted in the condition paragraph. Effect – As a result of the financial reporting matters identified in the condition paragraph, a material weakness exists in Porchlight, Inc.'s internal control over financial reporting. Recommendation – We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled appropriately and all reconciliation's/purchases/reports are being reviewed. View of Responsible Officials – Management agrees with the assessment and has committed to a corrective action plan.