Finding 49588 (2022-001)

Consolidated Financial Statement Findings ? Required to be reported in accordance with Government Auditing Standards. Significant Deficiency ? Item 2022-001 Condition: Impact?s June 30, 2022 consolidated financial statements were not issued until June 30, 2023. The audit process was significantly delayed because accounting records were not available in a timely manner as planned. Nine months after year-end, significant adjusting entries were required to reasonably state the consolidated financial statements in accordance with U.S. generally accepted accounting principles. Reporting deadlines for funders and creditors were missed. Criteria: Audited financial statements are due to various funders and creditors ranging from 120 to 180 days after Impact?s fiscal year end. Cause: During fiscal year 2022, Impact experienced a significant increase in operations, including the addition of six related entities. There were insufficient resources to manage the complexity of accounting and financing transactions in a timely manner. Effect: The audited June 30, 2022 consolidated financial statements were not issued until one year later on June 30, 2023. Questioned Costs: This finding does not involve any questioned costs. Recommendation: We recommend Impact ensure that financial records for all related entities are reconciled and closed on a monthly basis. Monthly financial statements, both individual entities and on a consolidated basis, should be provided to an analyzed by management and the Board of Directors. All financial information should be filed with funders and creditors in a timely manner. Management?s Response: Impact will take this recommendation and implement revised procedures to ensure timely month-end and year-end financial statements are provided to management, the Board of Directors, and independent auditors. Section III ? Uniform Guidance Finding Significant Deficiency ? Item 2022-001 As a result of the significant deficiency described above, the June 30, 2022 annual single audit was not issued timely, including all reports due in accordance with the Single Audit Act and Uniform Guidance and submission of the Data Collection Form to the Federal Audit Clearinghouse. These filings are due on the earlier of nine months after Impact?s year-end or thirty days after audit issuance. All aspects of the 2022-001 finding described above apply to the Uniform Guidance Finding.