Finding Text
Criteria ASTA?s financial statements and Schedule of Expenditures of Federal Awards (SEFA) should be prepared on the accrual basis of accounting in accordance with generally accepted accounting principles (GAAP) and the Uniform Guidance, respectively. Condition ASTA?s financial statements and SEFA did not include some expenses paid after its fiscal year end that were for services performed during fiscal year 2022. Further, the corresponding revenue and receivables associated with the omitted federal expenditures were also not reflected in ASTA?s financial statements, and our major program selected for testing, the Market Access Program, was also impacted by the cutoff errors. Context We reviewed a sample of payments and receipts after year-end noting two instances where invoices were for services performed during fiscal year 2022, but that were not properly accrued at year-end, resulting in audit adjustments to both ASTA?s financial statements and SEFA. Our sample of the payments and receipts after year-end was not a statistically valid sample. Cause The COO does review invoices processed after year-end to determine if amounts paid represented charges for the previous fiscal year, however, during the 2022 fiscal year end financial close, the COO missed identifying and accruing the two invoices in question, which resulted in the error detected. Effect ASTA?s financial statements and SEFA was understated by $74,567 prior to being corrected as part of our audit procedures. Repeat Finding Yes, this is a repeat of findings 2021-002 and 2021-003. Questioned Costs None Recommendation We recommend that management review all invoices received after year-end for federal programs to ensure that all expenses are properly accrued, regardless of the method in which they are paid.