Finding Text
Finding Number: 2024-001
Finding Type:
Internal Control Over Compliance – Other
Criteria:
General journal entries are part of Elevate’s financial reporting system and are prepared to allocate
costs, including payroll and related costs, to record grant billings and receivables, to record
subgrantee disbursements and to reconcile accounts as needed.
Condition Found and Context:
When performing testing related to expenditures, there were ten transactions that were related to
shared expenses (ie: insurance, administrative costs, facility costs, etc.) that were charged to
programs via general journal entries. While the costs charged to the program appear allowable and
reasonable, there is no formal approval process for the journal entries posted.
Cause and Effect:
The lack of a formal approval process could lead to errors in financial reporting and cost allocations.
Recommendation:
While management has an informal process for reviewing journal entries as part of the financial
statement review process, management should consider creating a formal policy that incorporates a
journal entry review and documentation of that review.
Views of the Responsible Official and Corrective Action Plan:
Management agrees with the findings. Procedures will be put in place as indicated in the Corrective
Action Plan on page 37.