Finding 43768 (2022-001)

Significant Deficiency Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-09-27

AI Summary

  • Core Issue: The Organization failed to properly account for transactions with joint ventures, leading to inaccuracies in financial reporting.
  • Impacted Requirements: Internal controls over financial statements were not effectively implemented, resulting in misstatements due to non-compliance with agreements.
  • Recommended Follow-Up: Review and enhance financial reporting processes to ensure adherence to joint venture agreements and improve accounting controls.

Finding Text

Condition: During our audit, we noted that the Organization did not account for transactions with various joint ventures in accordance with the agreements.Criteria: Management and those charged with governance are responsible for the design,implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Cause: Although the "development team" were monitoring the progress of the joint ventures to ensure the agreements were being followed, in isolated cases, the ?financial reporting team" did not follow the agreements/contracts to ensure the appropriate revenue recognition and investment accounting. Effect: As a result, revenues were over and understated and investments were misclassified as a result of not accounting for transactions in accordance with certain joint venture agreements and contracts. Recommendation: We recommend the Organization review the financial reporting responsibilities and make the necessary changes to improve the development accounting procedures and controls.

Corrective Action Plan

Planned Corrective Actions: We agree and have commenced a search for a controller over our accounting development team.

Categories

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 620210 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $5.00M
14.239 Home Investment Partnerships Program $800,000
94.006 Americorps $9,000