Finding Text
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters
Criteria or Specific Requirement: Key controls should be clearly documented as they occur throughout
the year. The organization should have key controls in place requiring that all journal entries be reviewed
and approved throughout the year. Entries should be reviewed by someone with the proper skills,
knowledge, and experience to know if the journal entries are correct
Condition/Context: It was noted during the audit that journal entries are not being reviewed and approved
by someone who has access to and is reviewing all of the underlying information to determine if the journal
entry is accurate and reasonable. Support for journal entries was also unable to be provided for the entries
we were testing.
Cause: The cause of this issue is the absence of a formalized and consistently applied journal entry review
process related to all grant program. The organization lacks clear procedures to ensure that all journal
entries are properly reviewed, approved, and documented before posting.
Effect: The lack of a formal review process for journal entries increases the risk of errors or misstatements
in the financial records of the SSVF program. Without proper oversight, there is also a heightened risk of
misclassification or improper allocation of expenses, which could lead to financial discrepancies or noncompliance
with federal regulations, potentially leading to disallowed costs or inaccuracies in reporting the
use of federal funds.
Recommendation: We recommend that the organization implement a formal journal entry review process
to ensure that all journal entries related to all programs are reviewed and approved by authorized personnel
before being posted. The process should include clear documentation of the review and approval steps to
maintain the integrity and accuracy of the financial records.
Repeat Finding: This is not a repeat finding.
Corrective Action Plan (CAP)
Explanation of Disagreement with Audit Findings:
There is no disagreement with the audit finding.
Actions Planned in Response to Finding:
In response to the finding, the organization will establish and implement a formal journal entry review
process. All journal entries will be reviewed and approved by authorized personnel before being posted to
the financial system. Additionally, clear documentation of the review and approval process will be
maintained to ensure accuracy and compliance.
Official Responsible for Ensuring CAP:
The Interim ED will be responsible for overseeing the implementation of corrective actions. Planned Completion Date for CAP:
The planned completion date is June 30, 2025.
Plan to Monitor Completion of CAP:
The Board of Directors will monitor the completion of the CAP through reviews of journal entries to
ensure the review process is being followed and all necessary documentation is maintained.