Finding Text
Criteria: Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error and compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
Condition: During the year, there was a significant period (Gap) in which the School’s established internal control policies and procedure over financial reporting and compliance were not followed.
Cause: The School experienced turnover in key personnel and external vendors responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Effect: The Gap in internal control prevented financial data from being accumulated and recorded in a timely manner. Accordingly, current management is unable to provide assertions as to the accuracy and valuation, existence, completeness, rights and obligations, presentation and disclosure of recorded balances and amounts nor ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
Recommendation: We recommend that current management continue their efforts to re-establish the School’s internal control to ensure that they can meet their responsibility of preparing and presenting fair financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error and ensure compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.