Finding 478697 (2022-001)

Material Weakness
Requirement
ABC
Questioned Costs
$1
Year
2022
Accepted
2024-07-17

AI Summary

  • Core Issue: Deferred revenue was not recorded correctly for grant funds, violating accounting principles.
  • Impacted Requirements: This affects the accurate reporting of revenue and compliance with generally accepted accounting principles.
  • Recommended Follow-Up: Review all grant agreements to ensure proper deferral of revenue based on agreement terms.

Finding Text

Condition: Generally accepted accounting principles require that deferred revenue be recorded for all amounts of grant funds received that have not yet been earned. Context: The improper recording of deferred revenues were identified during our audit work surrounding the revenue recognition of the major program. Effect: The adjustment to deferred revenues had the effect of increasing deferred revenues by $236,250 and decreasing grant revenue by $236,250. Recommendation: The Organization should review all grant agreements related to grant payments received and based upon the terms of the agreement determine if deferral is appropriate. Managements Response: We agree with finding, and will follow prescribed recommendation.

Corrective Action Plan

Condition: Generally accepted accounting principles require that deferred revenue be recorded for all amounts of grant funds received that have not yet been earned. Context: The improper recording of deferred revenues were identified during our audit work surrounding the revenue recognition of the major program. Effect: The adjustment to deferred revenues had the effect of increasing deferred revenues by $236,250 and decreasing grant revenue by $236,250. Recommendation: The Organization should review all grant agreements related to grant payments received and based upon the terms of the agreement determine if deferral is appropriate. Managements Response: We agree with finding, and will follow prescribed recommendation.

Categories

Questioned Costs

Other Findings in this Audit

  • 478698 2022-002
    Material Weakness
  • 1055139 2022-001
    Material Weakness
  • 1055140 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.493 Senior Services Capacity Expansion in Atlanta, Ga $589,837
14.218 Community Development Block Grants/entitlement Grants $61,728
97.024 Emergency Food and Shelter National Board Program $54,000