Finding Text
Finding is for the following federal award
Federal Assistance Listing Number Federal Program Name or Cluster Amount
21.023 Emergency Rental Assistance Program $646,823
21.027 Corona Virus State and Local Fiscal Recovery Funds $297,459
Type of Compliance Requirement: Other
Finding 2023-001: Reporting Deferred Revenue
Criteria:
Rental assistance loans were deferred by the Eviction Defense Collaborative in prior years and not properly
analyzed and recorded as revenue when earned.
Condition:
Eviction Defense Collaborative’s Director of Finance position has experienced high turnover in the prior year.
Context:
The accounting records are maintained using a QuickBooks (QB) general ledger accounting system. However, QB
accounts were not updated for deferred revenue as required by generally accepted accounting principles for
nonprofits using the accrual basis of accounting. There were also some relatively minor unexplained cash balances
in the general ledger control accounts.
Effect:
The effect was that the organization did not have controls and procedures in place to permit the normal analysis of
deferred revenue accounts in accordance with generally accepted governmental accounting practices. The impact
was that some account balances were not accurate and reliable and hindered the timely preparation of both internal
and external financial reports.
Cause:
The cause, in the auditor’s judgment, was turnover of the financial management staff with adequate skill, knowledge
and experience to maintain the organization’s general ledger accounting system, that did not allow the appropriate
staff to reconcile the account balances on a regular basis and prepare its annual financial statements.
Recommendation:
We recommend Eviction Defense Collaborative reconcile all assets, liability, and net asset accounts to supporting
schedules and documentation each month. The Eviction Defense Collaborative has hired the accounting firm
Scrubbed.net to assist with this process.
Views of Responsible Officials and Corrective Actions:
Eviction Defense Collaborative has retained a professional service firm, Scrubbed.net, to review and revise our
accounting system to better conform to current accounting practices.