Finding 394638 (2023-001)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-04-25

AI Summary

  • Core Issue: The accounting system fails to classify federal grant expenditures correctly, leading to discrepancies in reimbursement reports.
  • Impacted Requirements: Accurate reporting of federal grant expenditures is essential for reimbursement and compliance with grantor criteria.
  • Recommended Follow-Up: Update the accounting system to ensure proper classification of all grant funds and expenditures for accurate reporting.

Finding Text

Condition: The accounting system does not provide for proper classification of federal grant expenditures. Federal grant expenditures are required to be reported to the grantor for reimbursement by the organization. We noted during our audit testing, the monthly report for the 21st Century reimbursement billing did not agree with the monthly general ledger report from the accounting system. In addition, we noted changes made in the accounting system after the billing for reimbursement was prepared. Criteria: The accounting system should provide the proper classification of all federal grant funds received and expenditures made to ensure reporting to federal grantors is accurate. Cause: The accounting system was not setup correctly to properly classify federal grant expenses from other organization expenses. Effect: The balances reported for the 21st Century grant did not reflect accurate expenditures due to the accounting system not setup for classification of expenditures for that grant. Recommendation: We recommend that the organization's accounting system reflect the correct classification of all grant funds received and expended to ensure accurate reporting to all grantors and for accurate presentation in the Schedule of Federal Awards.

Corrective Action Plan

In years prior, the Boys & Girls Clubs of Central Illinois has consistently managed our internal accounting systems and federal grant reporting without incident while working with a 3rd party accounting firm. In 2022 we incorporated an internal fiscal director role to aid in those efforts. The Board of Directors & CEO later discovered a host of performance deficiencies, accounting and reporting errors made during the time period of FY23; causing the negative impact to our FY23 audit which has resulted in two audit findings. Effective October 2023, the Board of Directors along with the CEO took immediate action by making the following changes to ensure no future issues will negatively impact our internal accounting and reporting systems. 1 - The Fiscal Director role was permanently eliminated upon further investigation. 2- BGCCIL hired a 3rd pary accredited CPA firm who now performs all fiscal duties including general ledger classifications, producing monthly financial reports, and other important accounting functions.

Categories

Cash Management Reporting

Other Findings in this Audit

  • 394639 2023-001
    Material Weakness
  • 394640 2023-001
    Material Weakness
  • 394641 2023-002
    Material Weakness
  • 394642 2023-002
    Material Weakness
  • 394643 2023-002
    Material Weakness
  • 971080 2023-001
    Material Weakness
  • 971081 2023-001
    Material Weakness
  • 971082 2023-001
    Material Weakness
  • 971083 2023-002
    Material Weakness
  • 971084 2023-002
    Material Weakness
  • 971085 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.287 Twenty-First Century Community Learning Centers $2.41M
93.558 Temporary Assistance for Needy Families $46,014
16.726 Juvenile Mentoring Program $33,339