Finding 559822 (2024-001)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-05-07
Audit: 355778
Auditor: Aprio LLP

AI Summary

  • Core Issue: The client failed to record an unconditional promise to give in the correct period, leading to a prior period adjustment.
  • Impacted Requirements: This violates FASB ASC 958-605, which mandates that contributions should be recognized as revenue when received.
  • Recommended Follow-Up: Management should implement policies for timely recording, provide training on ASC 958-605, and regularly monitor compliance.

Finding Text

Condition - During our audit, we noted that the client did not record an unconditional promise to give when received. Instead, the contribution revenue was recorded in the incorrect period. This resulted in a prior period adjustment. Criteria - According to the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 958-605, contributions received, including unconditional promises to give, should be recognized as revenue in the period received. This standard ensures that financial statements accurately reflect the organization's financial position and activities. Effect - The incorrect recognition of contribution revenue led to a misstatement in the financial statements, requiring a prior period adjustment. This misstatement could affect the reliability and accuracy of the financial information provided to users of the financial statements. Cause - The cause of this issue appears to have been a lapse in oversight in applying the appropriate accounting standards for recognizing contribution revenue. The client may not have had adequate internal controls or procedures in place to ensure that unconditional promises to give were recorded timely and accurately. Recommendation - We recommend that management record this prior period adjustment and review internal controls and procedures related to the recognition of contribution revenue. Specifically:  Implement policies to ensure that unconditional promises to give are recorded as revenue in the period received.  Provide training to accounting personnel on the requirements of ASC 958-605.  Regularly review and monitor the recognition of contribution revenue to ensure compliance with applicable accounting standards. View of responsible officials - Management agrees with this assessment and has committed to a corrective action plan.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 559811 2024-001
    Material Weakness
  • 559812 2024-001
    Material Weakness
  • 559813 2024-001
    Material Weakness
  • 559814 2024-001
    Material Weakness
  • 559815 2024-001
    Material Weakness
  • 559816 2024-001
    Material Weakness
  • 559817 2024-001
    Material Weakness
  • 559818 2024-001
    Material Weakness
  • 559819 2024-001
    Material Weakness
  • 559820 2024-001
    Material Weakness
  • 559821 2024-001
    Material Weakness
  • 559823 2024-001
    Material Weakness
  • 559824 2024-001
    Material Weakness
  • 559825 2024-001
    Material Weakness
  • 1136253 2024-001
    Material Weakness
  • 1136254 2024-001
    Material Weakness
  • 1136255 2024-001
    Material Weakness
  • 1136256 2024-001
    Material Weakness
  • 1136257 2024-001
    Material Weakness
  • 1136258 2024-001
    Material Weakness
  • 1136259 2024-001
    Material Weakness
  • 1136260 2024-001
    Material Weakness
  • 1136261 2024-001
    Material Weakness
  • 1136262 2024-001
    Material Weakness
  • 1136263 2024-001
    Material Weakness
  • 1136264 2024-001
    Material Weakness
  • 1136265 2024-001
    Material Weakness
  • 1136266 2024-001
    Material Weakness
  • 1136267 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.558 Temporary Assistance for Needy Families $70,000
14.267 Continuum of Care Program $50,926
97.024 Emergency Food and Shelter National Board Program $15,337
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $10,000
16.575 Crime Victim Assistance $6,337
14.218 Community Development Block Grants/entitlement Grants $4,626