Finding Text
Finding 2022-4 Utilities Expense Improperly Classified as Rent
Name of Federal Agency:
Listing Award
Number Number
64.033 13-ZZ-134
U. S. Department of Veterans Affairs (VA)
Program Title
VA Supportive Services for Veteran Families (SSVF)
Criteria or specific requirement: Generally Accepted Accounting Principles (GAAP) requires
financial transactions be properly classified as to purpose and function.
13
THE ALSTON WILKES SOCIETY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED DECEMBER 31, 2022
Section III - Federal Award Findings and Questioned Costs (continued)
Condition: We selected a judgmental sample of 40 transactions to test. One out of the 40 sample
items appears to be improperly classified. Our audit testing identified a transaction in the amount of
$6,596.26 (sample item # 21) out of $134,400.16 total sample items that was recorded as" Rent,
Penalties, Fees," when evidence shows it should have been recorded as utility expenses.
Cause of condition: Existing internal controls did not properly function, where an employee
performing their normal duties, in the normal course of business, should have identified the error and
corrected it in a timely manner.
Potential effect of condition: This condition results in a noncompliance finding for the period under
audit.
Questioned Costs: The costs are allowable, but improperly classified. No questioned costs
identified.
Prevalence and Consequence: A judgmental sample of 40 items was selected. Out of the 40
sample items tested, one was found to be improperly classified. This condition appears to be an
isolated incident.
Repeat Finding: No
Recommendation: We recommend management continue to peruse effective internal controls to
enable an employee, during the performance of their normal course duties, to identify errors in a
reasonable amount of time, in order to enable management to identify and correct such errors at the
time, or before they are recorded in the accounting records.