Recommendation
We recommend that management enhance its internal control structure, including financial close and reporting, to ensure timely filing of future Single Audit reporting packages.
Management Response
Corrective Action: FNCH’s management agrees with the auditor’s recommendation. Due to the unprecedented challenges posed by the COVID-19 pandemic, the Finance Department experienced significant staffing disruptions, resulting in an 80% turnover rate, which notably included the departure of the CFO. Additionally, COVID-19 incidents among staff members adversely impacted attendance, leading to frequent absences that ranged from one to two weeks. This created severe staffing shortages that hampered the department's operations. The pandemic's effect extended beyond immediate staffing, complicating the recruitment of new employees in a competitive job market. Consequently, the Finance Department faced considerable difficulties in meeting its audit and tax filing deadlines.
FNCH will implement correction action steps to address the timely submission of audit reports and tax filings. The CFO will ensure audited financial statements are completed in a timely manner by implementing enhanced internal controls, including timely bank reconciliations, financial close, and reporting, to ensure timely filing of audit reports and tax filings.
Due Date of Completion: September 30, 2025
Responsible Party(ies): CEO, CFO