Finding 401165 (2023-002)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-06-18
Audit: 309200
Organization: Trellis Co. (MN)

AI Summary

  • Core Issue: The Corporation failed to properly record a significant noncash donation of a building and land valued at $2,180,000 due to a lack of established procedures for such transactions.
  • Impacted Requirements: This oversight affects the accuracy and completeness of financial statements, violating GAAP and management's responsibility for maintaining accurate accounting records.
  • Recommended Follow-Up: Implement regular reviews of unusual transactions and ensure monthly meetings between the CEO and CFO to verify all donations and financial activities are accurately recorded.

Finding Text

FINDING 2023-002: Audit Adjustments Criteria - The Corporation’s management has the responsibility to record, process, and summarize the accounting data to ensure that uses of the data have complete and accurate accounting records. Nonprofit organizations are also required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Condition - An adjustment was proposed to the financial statements to record the donation of a building and land with a total value of $2,180,000. Context - Management is responsible for the recording, processing, summarizing, and review of the accounting data (i.e. maintaining books and records) and for making the necessary adjustments to those books and records before the audit and preparation of the financial statements. Cause - The Corporation does not normally receive noncash contributions and does not have an established history of recording such transactions. The combination of the transition and the new or out of the ordinary transactions contributed to them not being recorded properly. Effect - Members of management, the Board of Directors, and any other users of the Corporation’s internal books and records did not have complete and accurate information. Recommendation - We recommend the Corporation establish procedures to regularly review out of the ordinary activities to ensure its accounting is complete and accurate. Auditee's comments and response - The Corporation has received property donations on occasion over the years. The donated property was not recorded at fair market value at the time of closing due to the timing of closing in December 2023, and the immediate transition of their financial controller early in January 2024. This omission was caught by the auditors prior to internal staff due to the key staff transition. Going forward the CEO and CFO will meet monthly to review financial statements and transactions and make sure all donations and other transactions are recorded according to accounting policies. Responsible party for corrective action: Lisa Fischer – Chief Operating Officer

Categories

No categories assigned yet.

Other Findings in this Audit

  • 401148 2023-001
    Significant Deficiency
  • 401149 2023-001
    Significant Deficiency
  • 401150 2023-001
    Significant Deficiency
  • 401151 2023-001
    Significant Deficiency
  • 401152 2023-001
    Significant Deficiency
  • 401153 2023-001
    Significant Deficiency
  • 401154 2023-001
    Significant Deficiency
  • 401155 2023-001
    Significant Deficiency
  • 401156 2023-001
    Significant Deficiency
  • 401157 2023-001
    Significant Deficiency
  • 401158 2023-001
    Significant Deficiency
  • 401159 2023-001
    Significant Deficiency
  • 401160 2023-001
    Significant Deficiency
  • 401161 2023-001
    Significant Deficiency
  • 401162 2023-002
    Significant Deficiency
  • 401163 2023-002
    Significant Deficiency
  • 401164 2023-002
    Significant Deficiency
  • 401166 2023-002
    Significant Deficiency
  • 401167 2023-002
    Significant Deficiency
  • 401168 2023-002
    Significant Deficiency
  • 401169 2023-002
    Significant Deficiency
  • 401170 2023-002
    Significant Deficiency
  • 401171 2023-002
    Significant Deficiency
  • 401172 2023-002
    Significant Deficiency
  • 401173 2023-002
    Significant Deficiency
  • 401174 2023-002
    Significant Deficiency
  • 401175 2023-002
    Significant Deficiency
  • 401176 2023-003
    Significant Deficiency
  • 401177 2023-003
    Significant Deficiency
  • 401178 2023-003
    Significant Deficiency
  • 401179 2023-003
    Significant Deficiency
  • 401180 2023-003
    Significant Deficiency
  • 401181 2023-003
    Significant Deficiency
  • 977590 2023-001
    Significant Deficiency
  • 977591 2023-001
    Significant Deficiency
  • 977592 2023-001
    Significant Deficiency
  • 977593 2023-001
    Significant Deficiency
  • 977594 2023-001
    Significant Deficiency
  • 977595 2023-001
    Significant Deficiency
  • 977596 2023-001
    Significant Deficiency
  • 977597 2023-001
    Significant Deficiency
  • 977598 2023-001
    Significant Deficiency
  • 977599 2023-001
    Significant Deficiency
  • 977600 2023-001
    Significant Deficiency
  • 977601 2023-001
    Significant Deficiency
  • 977602 2023-001
    Significant Deficiency
  • 977603 2023-001
    Significant Deficiency
  • 977604 2023-002
    Significant Deficiency
  • 977605 2023-002
    Significant Deficiency
  • 977606 2023-002
    Significant Deficiency
  • 977607 2023-002
    Significant Deficiency
  • 977608 2023-002
    Significant Deficiency
  • 977609 2023-002
    Significant Deficiency
  • 977610 2023-002
    Significant Deficiency
  • 977611 2023-002
    Significant Deficiency
  • 977612 2023-002
    Significant Deficiency
  • 977613 2023-002
    Significant Deficiency
  • 977614 2023-002
    Significant Deficiency
  • 977615 2023-002
    Significant Deficiency
  • 977616 2023-002
    Significant Deficiency
  • 977617 2023-002
    Significant Deficiency
  • 977618 2023-003
    Significant Deficiency
  • 977619 2023-003
    Significant Deficiency
  • 977620 2023-003
    Significant Deficiency
  • 977621 2023-003
    Significant Deficiency
  • 977622 2023-003
    Significant Deficiency
  • 977623 2023-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $3.66M
14.164 Operating Assistance for Troubled Multifamily Housing Projects $2.29M
10.415 Rural Rental Housing Loans $576,502
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $559,521
10.427 Rural Rental Assistance Payments $67,342
14.182 Section 8 New Construction and Substantial Rehabilitation $37,058
14.181 Supportive Housing for Persons with Disabilities $35,646
14.191 Multifamily Housing Service Coordinators $587