Finding 44421 (2022-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-02-02

AI Summary

  • Core Issue: There was a material weakness in internal controls, leading to the failure to record in-kind revenues and expenses for food donations in 2021 and 2022.
  • Impacted Requirements: Financial statements were not prepared in accordance with U.S. GAAP, resulting in material misstatements.
  • Recommended Follow-Up: Ensure accurate recording of in-kind donations at fair market value and strengthen internal controls to prevent future issues.

Finding Text

2022 ? 001 Type of Finding: ? Material Weakness in Internal Control over Financial Reporting Condition: In-kind revenues and expenses for donations related to the food pantry program were not recorded during the years ended July 31, 2022 and 2021. Revenues and expenses were incorrectly understated. As a result, audit entries were required to properly record the in-kind donations and distributions for the year ended July 31, 2022 and revenues and expenses for the year ended July 31, 2021 were restated. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: Revenues and expenses were materially misstated for the years ended July 31, 2022 and 2021. Cause: The Organization was not recording in-kind revenues and expenses for food donated to the organization as part of the food pantry program as required by GAAP. Repeat finding: This is not a repeat finding. Recommendation: The Organization should record their in-kind donations and distributions of food donated for the food pantry program at the fair market value of the donations. Views of responsible officials and planned corrective actions: Management will ensure in-kind contributions, including food donated for the food pantry program, and the related distributions, will be recorded at fair market value.

Corrective Action Plan

MATERIAL WEAKNESS 2022-001 Material Weakness in Internal Control Over Financial Reporting The organization should record their in-kind donations and distributions of food donated for the food pantry program at the fair market value of the donations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Grace Place will record in-kind donations and distributions of food donated for the food pantry program at the fair market value of the donations. Name(s) of the contact person(s) responsible for corrective action: Jerri Kautsky Planned completion date for corrective action plan: Effective immediately with the fiscal year ending July 31, 2022 and going forward.

Categories

Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 44422 2022-002
    Significant Deficiency
  • 44423 2022-001
    Material Weakness Repeat
  • 44424 2022-002
    Significant Deficiency
  • 44425 2022-001
    Material Weakness Repeat
  • 44426 2022-002
    Significant Deficiency
  • 620863 2022-001
    Material Weakness Repeat
  • 620864 2022-002
    Significant Deficiency
  • 620865 2022-001
    Material Weakness Repeat
  • 620866 2022-002
    Significant Deficiency
  • 620867 2022-001
    Material Weakness Repeat
  • 620868 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.287 Twenty-First Century Community Learning Centers $95,808
84.425 Education Stabilization Fund $48,594
10.558 Child and Adult Care Food Program $45,164
97.024 Emergency Food and Shelter National Board Program $11,320
11.008 Noaa Mission-Related Education Awards $535