Finding Text
Significant Deficiency – Item 2023-001– Year-End Closing and Required Financial Reporting Were not Performed in a Timely Manner (Repeat of Item 2022-001)
Condition: Impact’s June 30, 2023 consolidated financial statements were not issued until June 21, 2024. 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 2023, Impact experienced a significant increase in operations and major construction projects. There were insufficient resources to manage the complexity of accounting and financing transactions in a timely manner.
Effect: The audited June 30, 2023 consolidated financial statements were not issued until on June 21, 2024.
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. Finance should provide management and the Board of Directors monthly financial statements, both individual entities and on a consolidated basis. Additionally, all financial information should be filed with funders and creditors in a timely manner.
Management’s Response Impact designed a financial close calendar that assigns tasks to responsible resources. The closing process is inclusive of status meetings and milestones to track progress along the timeline. This process will be in place by March 31, 2025.
Section III – Uniform Guidance Findings – Applicable to Both Major Programs
Significant Deficiency – Item 2023-001 – Year-End Closing and Single Audit Reporting Were Not Performed in a Timely Manner
As a result of the significant deficiency described above, the June 30, 2023 annual single audit was not issued timely until November 12, 2024, 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 submissions are due on the earlier of nine months after Impact’s year-end or thirty days after audit issuance. All aspects of the 2023-001 finding described above apply to the Uniform Guidance Finding.