Finding Text
Criteria: Accounting principles generally accepted in the United States of America
require that amounts be recognized as revenues, with corresponding receivables if
applicable, when the product or service has been delivered to a customer and when the dollar
amount is readily determinable.
Condition: The Association’s controls were not effective to ensure it was recognizing
revenues and related receivables for reimbursement‐based programming in the same period the
expenditure occurred.
We consider this internal control deficiency to be a significant deficiency.
Context: Our procedures included examining subsequent cash receipts and vouching to
expenditures made during the fiscal year, identifying several such receipts that should
have been posted as receivables as of December 31, 2021 but were not.
Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as
stipulated in U.S. GAAP.
Effect: By not recording receivables in the correct period, revenues from reimbursement‐based
awards could be materially misstated.
Recommendation: We recommend the Association establish controls that allow for the
timely and accurate recording of grants and contracts receivable from reimbursement‐based
awards in the same period as their corresponding expenditures.
View of Responsible Officials: There is no disagreement with this audit finding.