Finding Text
Financial Statement Audit Finding:
Finding 2024-001 - Lack of adequate controls over the tracking of volunteer hours worked to
record donated services revenue and expense in the financial statements.
Type of Finding: Significant Deficiency
Criteria:
The auditee is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America (GAAP);
this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error. Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 958, provides guidance on donated services.
Condition:
The independent auditors noted instances of failures in the implementation and effectiveness of
internal control over the tracking of volunteer hours worked during the audit period.
Cause:
The Organization failed to perform certain procedures over the control of the tracking of volunteer
hours. There were instances of volunteer hours worked that did not agree to the underlying
documentation of time worked in a given period. Additionally, there were instances noted in which
volunteer time was not reviewed and approved in a timely manner.
Effect:
The failure to properly track and review volunteer hours worked allowed for potential misstatement of
the valuation of donated services revenue and expense in the financial statements.
Repeat Finding from Prior Year:
No
Recommendation:
We recommend the volunteer report be reviewed by management for completeness on a monthly
basis. We also suggest instructing volunteers to submit their hours in a timely manner for supervisor
review.