Finding Text
Material Audit Adjustments
Information on the Federal Program: U.S. Department of the Agriculture, Plains Regional Transition to Organic Partnership Program Assistance Listing No. 10.163, Grant Agreement No. 23-NOPXX-NE-0004.
Criteria: SAS 115 requires communication, in writing, to management and those charged with governance, of material weaknesses identified in an audit.
Condition and context: A material audit adjustment was proposed that was not identified by the Association’s internal control system.
Cause: Management did not identify an adjustment necessary to present the financial statements in accordance with U.S. GAAP. A material audit adjustment was proposed to correct an account balance.
Effect or Potential Effect: The control deficiency is a material weakness that results in a material misstatement of the financial statements that was not prevented, or detected and corrected, on a timely basis.
Identification of a Repeat Finding: New finding.
Recommendation: Management should review the financial statements to ensure all necessary adjustments are made and balances are reflected accurately.
Responsible Official’s Response: The Association will continue to rely on its system of oversight provided by the board of directors in reviewing the financial statements of the Association. The Association will also be mindful of identifying a qualified volunteer or potential board member who could review the financial statements.