Finding Text
Finding 2024-001
Significant deficiency in internal controls over financial reporting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Criteria
Internal controls over financial reporting should be in place to ensure proper reconciliations are being performed to ensure transactions are recorded in accordance with U.S. GAAP.
Condition/Context
During our audit, we noted that a significant amount of donor restrictions had been met in prior years but not released in those years.
Effect/Potential Effect
As a result, a prior period adjustment had to be booked to reclass $655,000 from net assets with donor restrictions to net assets without donor restrictions.
Cause
In the prior year, a year end review of restricted net assets was not performed to assess termed awards or to compare year end restricted net asset balances against expectations based on expenditures to date.
Repeat Finding
No
Recommendation
We recommend that PDA implement necessary internal controls to ensure that donor restricted balances are reviewed as part of year end close processes to determine if restrictions have been met and amounts should be released from restriction.
Views of Responsible Officials
Management agrees with the finding and has provided the corrective action plan following the Single Audit Report.