Finding 40108 (2022-001)

Material Weakness
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 51004
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: CFA lacks adequate controls to prepare accurate financial statements, leading to material misstatements.
  • Impacted Requirements: Financial statements and federal awards schedule must be materially correct and include all necessary disclosures.
  • Recommended Follow-Up: Management should stay informed about financial reporting standards and consider additional support for accurate financial preparation.

Finding Text

Preparation of the Financial Statements, Schedule of Expenditures of Federal Awards and Material Audit Adjustments Material Weakness Criteria: Complete controls over financial reporting include the ability to prepare financial statements and accompanying notes to the financial statements and the schedule of expenditures of federal awards that are materially correct and include all required disclosures. Condition: As auditors, we were requested to draft the financial statements from data provided by CFA. The data included material misstatements which, if not corrected through audit adjustments, would have resulted in financial statements that were materially misstated. The data also contained an error considered to be a prior period adjustment that overstated current revenue by $129,408. Additionally, the schedule of expenditures of federal awards was completed by the auditors with data provided by CFA that was incorrect as a result of audit adjustments. Cause: CFA has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that CFA would not be able to draft the financial statements and schedule of expenditures of federal awards that are correct without assistance of auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that CFA is aware of this condition on financial reporting purposes. Management and the board of directors should continually be aware of the financial accounting and reporting of CFA and changes in the accounting and reporting requirements. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

Preparation of the Financial Statements, Schedule of Expenditures of Federal Awards and Material Audit Adjustments Material Weakness Condition: As auditors, we were requested to draft the financial statements from data provided by CFA. The data included material misstatements which, if not corrected through audit adjustments, would have resulted in financial statements that were materially misstated. The data also contained an error considered to be a prior period adjustment that overstated current revenue by $129,408. Additionally, the schedule of expenditures of federal awards was completed by the auditors with data provided by CFA that was incorrect as a result of audit adjustments. Cause: CFA has limited staff to prepare full disclosure financial statements. Management?s Response and Corrective Action Plan: The year-end closing process will be revised to include accrual of revenue for expenses allocated to reimbursable grants that are reimbursed in the next fiscal year. Responsible Individuals: Amanda Burke, Jessi Black Anticipated Completion Date: 6/30/23

Categories

Reporting Material Weakness

Other Findings in this Audit

  • 40109 2022-002
    Material Weakness
  • 616550 2022-001
    Material Weakness
  • 616551 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.411 Investing in Innovation (i3) Fund $775,862
84.334 Gaining Early Awareness and Readiness for Undergraduate Programs $596,985