Finding Text
Finding 2022-1 - Material weakness in internal control over financial reporting/compliance? certain federal expenditures were not reported in the correct period on the accrual basis of accounting. Condition - Expenditures totaling $161,256 were incurred in 2021 not accrued and were expensed in 2022. As such federal expenditures were underreported in 2021. Criteria or Specific Requirement - The Uniform Guidance Section 200.303 requires non-Federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Effect - The lack of sufficient processes and internal controls puts MSMA at risk for misstatement due to error or fraud. In addition, this increases the risk of inaccurate reporting to federal government granting agencies. Recommendation - MSMA should ensure that all personnel are aware of the requirements for reporting in the correct period and that accounting personnel are aware of such expenditures in a timely manner. Management Response - Management agrees with the finding and will ensure expenditures are recorded in the correct period going forward.