Finding Text
Type of Finding: Material weakness over compliance
Condition:
During our testing over major federal program expenditures, we noted a number of expenditures misclassified
between grants and grant years which caused material misstatements to the schedule of expenditures
of federal awards (the “Schedule”). As a result, material adjustments were required in order to present the
Schedule accurately.
Criteria:
All federal program expenditures should be recorded in such a way as to be able to readily determine the
amount of expenditures related to a particular grant in a particular grant year.
Cause:
There are continued, lingering issues from the implementation of the new accounting system from the prior
year that are still being corrected, combined with staff turnover that resulted in a lack of appropriate tracking
of grant activity.
Effect:
There is the potential that balances related to the grants, including receivables, revenues, and expenses, could
be materially misstated.
Auditor’s Recommendation:
We recommend that a system be implemented to track grant activity and compare grant expenditures to grant
revenue along with a comparison of cash receipts to reimbursement requests. We also recommend that grant
activity be reconciled on a monthly basis and that the reconciliations be reviewed by someone other than the
preparer and that evidence of this review be documented.
View of Responsible Officials:
Management agrees with the finding. See corrective action plan.