Finding 589549 (2022-002)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-06-30

AI Summary

  • Core Issue: Key financial accounts were not reconciled with the general ledger as of June 30, 2022, due to a lack of leadership in the accounting department.
  • Impacted Requirements: Monthly reconciliations for grants receivable, deferred revenue, grant revenue, pledges, and accrued expenses were not completed, affecting financial accuracy.
  • Recommended Follow-Up: Ensure monthly reconciliations are performed and maintain a fully staffed accounting team to strengthen internal controls and accountability.

Finding Text

2022-002 ? Account Reconciliations Criteria: Financial statement accounts should be reconciled to supporting documentation and the general ledger account balance on a monthly basis. Condition: At June 30, 2022, the grants receivable and related deferred revenue accounts, grant revenue accounts, pledges receivable and accrued expense accounts were not reconciled with the general ledger. Cause: During most of the year ended June 30, 2022, Sadler Health Center Corporation (the Center) was functioning without a full time Chief Financial Officer. This placed more work on the existing staff, but more importantly left a void in the leadership and accounting knowledge needed for proper controls and reconciliation of the account balances for the Center. The Center did contract for a fractional Chief Financial Officer during 2022 to help with basis financial operations, however, they could not full fill all the responsibilities of a full time Chief Financial Officer. Effect: Basic accounting processes were either not completed or not completed timely, which resulted in additional entries needed to adjust the books and records of the Center. Questioned Costs: None Repeat Finding: Not a repeat finding. Recommendation: The Center needs to ensure the grants receivable, deferred revenue, grant revenue, pledges and accrued expense accounts are reconciled with support and the general ledger on a monthly basis. Views of Responsible Officials: Management agrees with the above finding and has taken the following actions: ? Leadership hired a full-time Controller, effective date of April 2023 ? Temporary contracted bookkeeper engaged, effective date March 2023 ? Professional recruiting support engaged for CFO search ? Sr. Staff Accountant position has been posted for hire ? Fully staffed accounting department will consist of the following: o Chief Financial Officer o Controller o Sr. Staff Accountant o Staff Accountant ? Interim CFO and Controller are actively engaged in establishing internal controls and procedures for reconciliation of accounts on a monthly basis; including establishing a daily, weekly, monthly, quarterly and annually tasks list with Assigned personnel and due dates.

Categories

Internal Control / Segregation of Duties

Other Findings in this Audit

  • 13107 2022-002
    Material Weakness
  • 13108 2022-002
    Material Weakness
  • 13109 2022-003
    Material Weakness
  • 13110 2022-003
    Material Weakness
  • 589550 2022-002
    Material Weakness
  • 589551 2022-003
    Material Weakness
  • 589552 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $1.39M
93.224 American Rescue Plan Act Funding for Health Centers - Covid 19 $393,723
93.268 Immunization Cooperative Agreements -Covid 19 $223,988
21.019 Coronavirus Relief Fund - Covid 19 Grant $167,890
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) - Covid 19 $87,310