Finding 485638 (2023-001)

Person to contact regarding findings: Alexis London Section II -- Financial Statement Findings 2023-001 Finding – Internal control over financial reporting Identification as a repeat finding This is not a repeat finding. Criteria Management is responsible for establishing controls over financial reporting. Statement of condition Management is responsible for the design, implementation, and maintenance of a system of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. During our audit, we noted an instance in which the organization’s system of internal control over financial reporting did not prevent or detect and correct a material misstatement to the organization’s financial statements. Cause Management’s review of the facts and circumstances regarding recognition of a conditional contribution installment erroneously concluded the barrier was not overcome. Context A material audit adjustment related to the timing of recognition of a single installment from a conditional contribution was discovered during inquiries with management and review of the general ledger. The issue with the organization’s system of internal control over financial reporting represents a material weakness in internal control. The internal control deficiency was not discovered as a result of the use of sampling procedures. Effect or potential effect The organization’s financial statements were not free from material misstatements prior to adjustments proposed by the auditor. The organization utilized the auditor to assist with preparation of the financial statements in accordance with generally accepted accounting principles. Questioned costs $0 Recommendation The organization should ensure proper communication and review of conditional grants on an annual basis. Views of responsible officials Management plans to use the recommendation of the auditors.