Finding 496984 (2023-002)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-17

Audit: 319737

Organization: Deerfield Valley Communications Union District (VT)

Auditor: Berry Dunn McNeil & Parker LLC

AI Summary

Core Issue: The District is reporting federal grant expenditures on a cash basis instead of the required accrual basis.
Impacted Requirements: This inconsistency may lead to grant expenditures being recorded in the wrong periods, affecting financial accuracy.
Recommended Follow-Up: Implement policies to ensure all grant expenditures are reported on an accrual basis throughout the year.

Finding Text

Finding Number: 2023-002 - Preparation of the Schedule of Expenditures of Federal Awards Criteria: The District should be reporting federal grant expenditures on an accrual basis of accounting in order to be consistent with the District's financial statements. Condition Found: The District is currently reporting grant expenditures on a cash basis which is not consistent with the financial statements prepared using the accrual basis of accounting as a result grant expenditures could be reported in improper periods. Cause and Effect: Having to adjust for accrual account balances resulted in errors that an ongoing accrual accounting process would have helped prevent or detect and correct timely. As a result of this condition, the District reported grant expenditures that had been accrued and reported in the prior year's Schedule of Expenditures of Federal Awards. Recommendation: It was recommended that the District implement policies and procedures to report grant expenditures on the accrual basis of accounting throughout the year. Identification as a Repeat Finding, if applicable: Not applicable Management response: Management agrees with the findings and recommendations.

Corrective Action Plan

Corrective Action Plan: The District acknowledges that accruals of material vendor invoices were delayed due to receiving invoices many months after performance of contracted work. Accruals going forward will be estimated based on either the vendor’s estimated cost of work or the estimated cost per mile completed, less invoices received, through the date that the trial balance is delivered to the auditors for the period under audit. Additionally, monthly accruals will be entered for material expenses. The Board plans to remain involved in the financial activities of the District to provide oversight by performing a monthly review of the financial information of the District to provide mitigating controls over financial statement reporting. During 2024, the District hired an experienced Treasurer to provide tax and accounting services to the District. The Treasurer is a Certified Public Accountant in good standing, a Certified Internal Auditor and a Certified Fraud Examiner and is actively involved with other Communication Union Districts within the State of Vermont. We expect this oversight to relieve these material weaknesses. Responsible party: Gabrielle Ciuffreda, Executive Director Anticipated Completion Date: Ongoing

Other Findings in this Audit

496985 2023-002

Material Weakness
1073426 2023-002

Material Weakness
1073427 2023-002

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
21.027	Coronavirus State and Local Fiscal Recovery Funds	$4.95M