Finding 509732 (2023-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-11-21
Audit: 329403
Organization: Ensemble Learning (CA)

AI Summary

  • Core Issue: Timely and accurate reconciliation of subsidiary ledgers for deferred grant income and grant revenue is lacking.
  • Impacted Requirements: Increased risk of unnoticed errors and discrepancies, along with potential for fraud due to inadequate oversight.
  • Recommended Follow-Up: Implement regular reconciliation processes and enhance oversight of general ledger accounts.

Finding Text

Statement of Condition - Organization personnel did not perform timely, accurately, and complete reconciliation and analysis of subsidiary ledgers for deferred grant income and grant revenue. Effect- the lack of timely reconciliations increases the risk that errors and discrepancies will go unnoticed for extended periods of time. It also increases the opportunity for fraud if there is inadequate oversight of the general ledger accounts and related subsidiary ledger reconciliation.

Corrective Action Plan

In March 2023, the Organization contracted a third-party accounting firm that implemented new accounting and financial reporting procedures. While this could not cover prior lost information, their updated processes and support ensured the books of record were correctly stated and supported to have accurate July 31, 2024, financial statements and related notes. Specific additional actions taken include the following internal controls: 1. All reconciliations are now reviewed by multiple individuals, including the third-party accounting firm and management, before they are finalized. 2. In July 2024, the Organization retained the services of a third-party fractional CFO, who is providing an additional level of review to ensure completeness and accuracy. 3. The Organization has increased the use of shared, company-controlled electronic data storage to ensure the retention of all source documentation.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 509733 2023-001
    Material Weakness
  • 509734 2023-002
    Material Weakness
  • 509735 2023-003
    Material Weakness
  • 1086174 2023-001
    Material Weakness
  • 1086175 2023-001
    Material Weakness
  • 1086176 2023-002
    Material Weakness
  • 1086177 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.365 English Language Acquisition State Grants $720,154
84.423 Supporting Effective Educator Development Program $123,709