Finding Text
Criteria and Condition: Subsequent to the issuance of the audited financial statements for the year ended April 30, 2023, it was discovered that the Organization recorded certain pledges receivable and revenue based on estimates calculated by the Organization, rather than formal commitments which is not in accordance with the requirements of U.S. GAAP.
Cause: Metro United Way, Inc. was not clear on the authoritative guidance to follow in regard to recording revenue and pledges receivable for certain campaigns that supporting documentation was not provided.
Effect: Management restated the financial statements for the year ended April 30, 2023, to correct the overstatement. The adjustments reduced pledges receivable, revenue, and change in net assets by approximately $2,260,000, as compared to the balances previously reported as of April 30, 2023.
Recommendation: Ensure that all revenue and pledges receivable are recorded in accordance with U.S. GAAP by recording pledges based on a formal commitment provided to the Organization.
Views of Responsible Officials and Planned Corrective Actions: Metro United Way, Inc. agrees with the finding and the recommended procedures have been implemented for fiscal year ended April 30, 2024.