Finding 578355 (2022-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-11-15
Audit: 3317
Auditor: Sb & Company LLC

AI Summary

  • Core Issue: The Organization struggled to find supporting documents for 2022 financial transactions due to high turnover in key management roles.
  • Impacted Requirements: There is a failure to maintain an adequate internal control system for reliable financial reporting, violating generally accepted accounting principles.
  • Recommended Follow-Up: Implement training and succession planning, update financial reporting procedures, and establish clear document retention policies to improve accessibility of supporting documentation.

Finding Text

Finding 2022-001 U.S. Department of Health and Human Services Programs: All Significant Deficiency over Financial Reporting Repeat Finding: No Condition: The Organization could not readily locate and provide supporting documentation for 2022 financial transactions. Criteria: Entities must maintain an adequate system of internal controls over financial reporting to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles. Entities must also maintain support for all financial transactions. Cause: The Organization experienced significant turnover in key management positions during fiscal year 2022. As a result, supporting documentation for financial transactions could not be located initially and were not readily available. Effect: Supporting documentation for financial transactions was not readily available for review which delayed the financial report process and the audit process, including late submission of the Single Audit. Questioned Costs: None. Recommendation: We recommend that the Organization ensure appropriate training, knowledge transfer, and succession planning within the organization to ensure that turnover in key management positions does not cause disruption to operations or financial reporting. We also recommend that the Organization review and update monthly and year-end financial reporting procedures and checklists as necessary, to assist in the preparation of financial records, and develop policies around document retention and storage to ensure supporting documentation can be readily located and accessed when needed. Management’s Response and Corrective Action Plan Management agrees with the finding. See schedule of corrective action.

Categories

Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1913 2022-001
    Significant Deficiency
  • 1914 2022-002
    Significant Deficiency
  • 578356 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.914 Hiv Emergency Relief Project Grants $3.58M