Finding 392124 (2023-002)

Material Weakness
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-04-02

AI Summary

  • Answer: The organization lacks effective internal controls over financial reporting, which can lead to undetected misstatements.
  • Trend: There is a noticeable absence of control awareness among employees, impacting the overall financial integrity.
  • List: Recommend implementing regular reviews by independent individuals and enhancing training on control importance.

Finding Text

Criteria: Generally accepted accounting principles in the United States of America provides that the design or operation of an internal control structure over financial reporting allows management or employees in the normal course of performing their assigned functions to prevent, or detect and correct, misstatements on a timely basis. This includes the need for an individual, not directly involved in the preparation of transactions or financial statement amounts, to provide a review of the work performed. There appears to be a general lack of control consciousness within the Organization.

Corrective Action Plan

The following actions will be taken to address this process. A formalized closing process, completed on both a monthly and annual basis for all financial statement areas, has been initiated. To aid in this process, the accounting software suite used by the organization was expanded to add additional financial reporting modules. In addition, formal modifications have been made to the closeout process. These modifications will include the addition of new support schedules for all significant accounts. To ensure proper segregation, the schedules will be prepared and reviewed by separate individuals with the organization. As part of this new process, these support schedules will be reviewed to ensure consistency with the corresponding general ledger account. Any variances that are identified will be immediately resolved. Management is confident that the actions undertaken will improve the internal controls and financial reporting process of the organization.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392123 2023-001
    Significant Deficiency
  • 968565 2023-001
    Significant Deficiency
  • 968566 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $4.11M