Finding 517188 (2023-002)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-12-30
Audit: 335142
Auditor: Frankel LLC

AI Summary

  • Core Issue: The Club failed to review all transactions, leading to unrecorded or improperly recorded items in the general ledger.
  • Impacted Requirements: This violates internal control standards necessary for reliable financial reporting under GAAP.
  • Recommended Follow-Up: Implement the Corrective Action Plan to ensure all transactions are accurately recorded and reviewed.

Finding Text

Criteria: Internal controls should be in operation that provide reasonable assurance of the Club’s ability to report financial data reliably in accordance with generally accepted accounting principles (GAAP). Condition: The Club’s accounting personnel must review and record all transactions related to the current period in the general ledger in accordance with GAAP. Cause: The Club did not review all transactions to identify and record significant receivable and investment changes and the related revenue implications in its general ledger. Effect: The Club had significant unrecorded or improperly recorded transactions in the general ledger which resulted in a significant number of adjusting entries that were material to the financial statements. Response: See Corrective Action Plan.

Corrective Action Plan

Action(s) Taken or Planned on the Finding: Our plan to accurately account for transactions is as follows: 1.) The organization is adding additional staff to the accounting department, which will allow for separation of duties, better tracking, and additional oversight from month to month. 2.) The CFO will work closely with the Chief Development Officer and accounting personnel to develop a monthly reconciliation process that ensures contribution and special event activity is reviewed and accurately recorded in the appropriate period. This will allow us to account for transactions accurately and to remain in accordance with U.S. GAAP. This corrective action plan will be reviewed annually to ensure compliance. Anticipated Completion Date: While additional procedures were implemented in January 2023, employee turnover and the implementation of a new general ledger system created additional challenges and the procedures developed were not sufficient to prevent the identified issues. Updated procedures will begin in December 2024.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 517187 2023-001
    Material Weakness
  • 1093629 2023-001
    Material Weakness
  • 1093630 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.287 Twenty-First Century Community Learning Centers $570,809
10.558 Child and Adult Care Food Program $91,180
16.738 Edward Byrne Memorial Justice Assistance Grant Program $61,192
16.726 Juvenile Mentoring Program $56,863
10.559 Summer Food Service Program for Children $27,226