Finding Text
Preparation of the Financial Statements, Schedule of Expenditures of Federal Awards and Material Audit Adjustments Material Weakness Criteria: Complete controls over financial reporting include the ability to prepare financial statements and accompanying notes to the financial statements and the schedule of expenditures of federal awards that are materially correct and include all required disclosures. Condition: As auditors, we were requested to draft the financial statements from data provided by CFA. The data included material misstatements which, if not corrected through audit adjustments, would have resulted in financial statements that were materially misstated. The data also contained an error considered to be a prior period adjustment that overstated current revenue by $129,408. Additionally, the schedule of expenditures of federal awards was completed by the auditors with data provided by CFA that was incorrect as a result of audit adjustments. Cause: CFA has limited staff to prepare full disclosure financial statements. Effect: There is a reasonable possibility that CFA would not be able to draft the financial statements and schedule of expenditures of federal awards that are correct without assistance of auditors. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, it is important that CFA is aware of this condition on financial reporting purposes. Management and the board of directors should continually be aware of the financial accounting and reporting of CFA and changes in the accounting and reporting requirements. Views of Responsible Officials: Management agrees with the finding.