Finding 405922 (2023-001)

Material Weakness Repeat Finding
Requirement
BL
Questioned Costs
-
Year
2023
Accepted
2024-07-01
Audit: 311459
Auditor: Wipfli LLP

AI Summary

  • Core Issue: IMPACT did not reconcile key financial accounts during fiscal year 2023, leading to inaccurate management information.
  • Impacted Requirements: This violates Uniform Guidance 200.302(b)(4), which mandates effective control over funds and accurate reporting.
  • Recommended Follow-Up: Implement timely and accurate reconciliation procedures to prevent fraud and ensure reliable financial reporting.

Finding Text

Fiscal Internal Controls Condition: IMPACT Community Action Partnership, Inc. (IMPACT) did not reconcile cash, grant revenue, accounts receivable, or refundable advances during fiscal year 2023. Criteria or Specific Requirement: An accounting system should provide timely and accurate information for management. The reconciliation of account balances is an integral internal control activity to determine that stated account balances are accurate and fairly reported. Organization management and accounting personnel should reconcile general ledger accounts to subsidiary ledgers and other supporting documents in a timely and effective manner. Uniform Guidance 200.302(b)(4) states each non-federal entity must provide for “effective control over, and accountability for, all funds, property, and other assets.” Effect: Without performing adequate account reconciliations, information provided to management is inaccurate. Also, the probability that fraud or material errors will occur and go undetected generally increases. Cause: Rapid growth of new funding without a corresponding increase in fiscal personnel, combined with the late issuance of the September 30, 2022, audited financial statements resulted in significant delays in reconciliations and preparing for the September 30, 2023 audit. Repeat: Yes - Years as Repeat Finding: Three 2022-001 Auditor's Recommendations: We recommend IMPACT implement procedures to ensure accounts are reconciled timely and accurately. View of Responsible Officials: Management agrees with the finding and has developed and begun implementation of a corrective action plan.

Corrective Action Plan

Management’s Response: Management agrees with the finding. Contact Person Responsible for Corrective Action: Anne Bacon, CEO Corrective Action Plan: The auditor finding concludes that the cause of the finding is: “Rapid growth of new funding without a corresponding increase in fiscal personnel, combined with the late issuance of the September 30, 2022, audited financial statements resulted in significant delays in reconciliations and preparing for the September 30, 2023 audit..” In order to address these causes, IMPACT Community Action Partnership will follow a rectifying course of action. 1. Hire a Controller in order have a staff person focused entirely on the internal processes of the agency. (complete) 2. Procure a more robust fiscal software that will create efficiencies around reconciliations. (Procurement complete) 3. Contract with an accounting specialist to assure 2024 reconciliations are up to date and the transfer to the new accounting software is completed in a timelier manner (by July 15, 2024) Anticipated Completion Date: July, 2024

Categories

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 405923 2023-001
    Material Weakness Repeat
  • 405924 2023-001
    Material Weakness Repeat
  • 405925 2023-001
    Material Weakness Repeat
  • 405926 2023-001
    Material Weakness Repeat
  • 405927 2023-002
    Material Weakness Repeat
  • 405928 2023-002
    Material Weakness Repeat
  • 405929 2023-002
    Material Weakness Repeat
  • 405930 2023-002
    Material Weakness Repeat
  • 405931 2023-002
    Material Weakness Repeat
  • 405932 2023-003
    - Repeat
  • 982364 2023-001
    Material Weakness Repeat
  • 982365 2023-001
    Material Weakness Repeat
  • 982366 2023-001
    Material Weakness Repeat
  • 982367 2023-001
    Material Weakness Repeat
  • 982368 2023-001
    Material Weakness Repeat
  • 982369 2023-002
    Material Weakness Repeat
  • 982370 2023-002
    Material Weakness Repeat
  • 982371 2023-002
    Material Weakness Repeat
  • 982372 2023-002
    Material Weakness Repeat
  • 982373 2023-002
    Material Weakness Repeat
  • 982374 2023-003
    - Repeat

Programs in Audit

ALN Program Name Expenditures
21.023 Covid-19 Emergency Rental Assistance Program $22.68M
93.568 Low-Income Home Energy Assistance $13.71M
93.569 Community Services Block Grant $962,119
93.499 Covid-19 Low Income Household Water Assistance Program $758,824
14.218 Community Development Block Grants/entitlement Grants $199,383
81.042 Weatherization Assistance for Low-Income Persons $180,086
14.239 Home Investment Partnerships Program $111,041
97.024 Emergency Food and Shelter National Board Program $5,926