Finding 50454 (2022-002)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-02-20

AI Summary

  • Core Issue: Internal controls failed to ensure accurate reporting of grant amounts, leading to discrepancies between reported and actual figures.
  • Impacted Requirements: Lack of documentation from the accounting system undermines compliance with federal reporting standards.
  • Recommended Follow-Up: Provide staff training on internal controls and ensure all reports are reviewed and supported by documentation before submission.

Finding Text

Finding: 2022-002 ? Reporting Identification of the federal program: U.S. DEPARTMENT OF EDUCATION Education Stabilization ? CFDA 84.425(E), 84.425 (F), 84.425(M) Criteria: Internal controls should be in place that provide reasonable assurance that system generated records for all grant activities allow for proper reporting for reimbursement. Condition: During our testing of financial reports to the grantor, it was determined a breakdown in internal controls occurred, because staff did not keep support for amounts reported to grantors from the accounting system. Staff tried to re-create the reports with the accounting system and amounts were materially different than originally reported to the grantor. Cause: An oversight in management resulted in support to be disregarded therefore, the College had no support to verify amounts reported. Effect: The deficiencies in the design and operation of the internal controls in this area could have resulted in the College being paid for expenses not actually expended.Questioned Costs: None Context: During our testing of reports submitted to grantors, it was noted that there was no documentation from the accounting system to support reports submitted. Repeat Finding: No Recommendation: Additional training for staff is needed in the area of internal control over reporting. All reports filed should be thoroughly reviewed and approved before issuance. This review would include tying amounts reported to attached support from the accounting system. Views of responsible officials: Management is in agreement and will implement a Corrective Action Plan, see pages 54-55 of the current year audit.

Corrective Action Plan

Corrective Action Plan February 16, 2023 Cognizant or Oversight Agency for Audit Independence Community College respectfully submits the following corrective action plan for the year ended June 30, 2022. Name and address of independent public accounting firm: Jarred, Gilmore & Phillips, PA, P.O. Box 779, 1815 S Santa Fe, Chanute, Kansas 66720. Audit period: Year ended June 30, 2022. The findings from the February 16, 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Finding: 2022-001 ? Improper Classification of Transactions Condition: Reconciliations of most balance sheet accounts found transactions that were improperly classified and/or not recorded at all. These balance sheet account reconciliations resulted in material amounts of general ledger adjustments posted after year end and through the date of the audit report. Recommendation: Additional training for staff is needed in the area of financial statement preparation and use of the general ledger software. Views of responsible officials: We are in agreement and the proper training will be added. Policies will also be updated to include additional detail & steps to assure that misclassifications can be traced and reclassified in a timely manner, along with assuring reconciliation of all balance sheet accounts can properly occur monthly. Finding: 2022-002 ? Reporting Condition: During our testing of financial reports to the grantor, it was determined a breakdown in internal controls occurred, because staff did not keep support for amounts reported to grantors from the accounting system. Staff tried to re-create the reports withthe accounting system and amounts were materially different than originally reported to the grantor. Recommendation: Additional training for staff is needed in the area of internal control over reporting. All reports filed should be thoroughly reviewed and approved before issuance. This review would include tying amounts reported to attached support from the accounting system. Views of responsible officials: We are in agreement and policies will be updated to include the proper internal controls are in place. It will also be required that all supporting GL documentation be included for all reporting aspects for Grants from the draws to annual reports. If the Oversight Agency for Audit has questions regarding this plan, please call Jonathan Sadhoo, Vice President for Administration & Finance, at (620) 332-5412. Sincerely, Independence Community College Independence Community College -

Categories

Internal Control / Segregation of Duties Cash Management Reporting

Other Findings in this Audit

  • 50455 2022-002
    Material Weakness
  • 50456 2022-002
    Material Weakness
  • 626896 2022-002
    Material Weakness
  • 626897 2022-002
    Material Weakness
  • 626898 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $723,696
84.047 Trio_upward Bound $314,753
84.042 Trio_student Support Services $247,664
84.425 Education Stabilization Fund $153,795
84.007 Federal Supplemental Educational Opportunity Grants $86,744
84.033 Federal Work-Study Program $52,326
11.300 Investments for Public Works and Economic Development Facilities $23,587
84.048 Career and Technical Education -- Basic Grants to States $21,584
84.116 Fund for the Improvement of Postsecondary Education $10,732
84.063 Federal Pell Grant Program $2,325