Finding 497622 (2023-001)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-23

Audit: 320417

Organization: Peace Villa Inc. (MN)

Auditor: Burkhardt & Burkhardt LTD

AI Summary

Core Issue: The Organization approved corrections for misstatements but lacks effective controls to prevent them.
Impacted Requirements: There are insufficient controls to ensure financial records are accurate and comply with GAAP.
Recommended Follow-Up: Evaluate and enhance internal control processes to ensure timely adjustments of accounts to year-end balances.

Finding Text

Material Audit Adjustments Condition: The audit firm proposed, and the Organization approved corrections of certain misstatements. Criteria The Organization should have controls in place to prevent and detect a material misstatement in the financial statements in a timely manner. Management is responsible for the accuracy and completeness of all financial records and related information. Their responsibility includes adjusting the financial statements to correct material misstatements. Cause: The Organization has not established controls to ensure that all accounts are adjusted to their appropriate year-end balances in accordance with GAAP. Effect: The design of internal control over completeness and accuracy of financial records could adversely affect the Organization’s ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Recommendation: The Organization should continue to evaluate its internal controls processes to determine if additional internal control procedures should be implemented to ensure that accounts are adjusted to their appropriate year end balances in accordance with GAAP.

Corrective Action Plan

Corrective Acton Plan (CAP) a) Actions Planned in Response to the Finding: The Organization will review and approve adjusting journal entries as proposed by the auditor, as well as taking responsibility for the audited financial statements. b) Official Responsible for Ensuring Corrective Action: Brenda Schmitz, Office Manager, will review the adjusting journal entries and approve them. c) Planned Completion Date for the Corrective Action: The corrective action plan for this finding will be completed by December 31, 2024. d) Explanation of Disagreement: There is no disagreement with the audit finding. e) Plan to Monitor Completion of Corrective Action: The Board will be monitoring this corrective action plan.

Other Findings in this Audit

497623 2023-002

Significant Deficiency Repeat
497624 2023-003

Significant Deficiency Repeat
497625 2023-001

Material Weakness
497626 2023-002

Significant Deficiency Repeat
497627 2023-003

Significant Deficiency Repeat
497628 2023-001

Material Weakness
497629 2023-002

Significant Deficiency Repeat
497630 2023-003

Significant Deficiency Repeat
1074064 2023-001

Material Weakness
1074065 2023-002

Significant Deficiency Repeat
1074066 2023-003

Significant Deficiency Repeat
1074067 2023-001

Material Weakness
1074068 2023-002

Significant Deficiency Repeat
1074069 2023-003

Significant Deficiency Repeat
1074070 2023-001

Material Weakness
1074071 2023-002

Significant Deficiency Repeat
1074072 2023-003

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
10.766	Community Facilities Loans and Grants	$5.62M
10.415	Rural Rental Housing Loans	$1.05M
10.427	Rural Rental Assistance Payments	$120,308