Finding Text
Finding No. 2022-001:
Type of Finding: Material Weakness in Internal Control over Financial Reporting
This is also considered a finding under Federal Award Findings and Questioned Costs. This finding is applicable to all federal programs.
Criteria - An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) and grant reports in accordance with Federal and State compliance requirements, including a robust financial close process at year end.
Condition - In fiscal year 2022, the Organization’s accounting processes and internal controls over financial reporting were not functioning timely to support generating complete and accurate financial information. The year end was not closed in accordance with the Organization’s financial close policy. Multiple adjustments to the trial balances were made, necessitating repeated revisions to the statement of financial position account reconciliations, and grant schedules. The books and records were not closed and finalized until many months after year end. In addition, many accounting adjustments were needed throughout the audit process.
Cause - The Organization experienced staffing shortages and related difficulties during the fiscal year.
Effect - The books and records were not closed and finalized until many months after year end.
Context - The Organization’s accounting processes and internal controls over financial reporting were not functioning properly.
Recommendation - We recommend that the Organization maintain an adequate level of appropriately trained and experienced personnel. This will help ensure that the accounting processes and internal controls over financial reporting will function properly, and that the financial close process will be complete, accurate, and timely.
Management’s Response/View of Responsible Officials - Addressing the significant housing needs in southern Connecticut impacted the Organization's ability to
complete bookkeeping duties in a timely manner during 2022. However, bookkeeping of expenditures for Federal Awards was not affected, nor were adjusting transactions for these expenditures required during This is also considered a finding under Federal Award Findings and Questioned Costs. This finding is applicable to all federal programs.the audit. These timing weaknesses - none of which impacted the legitimacy, truthfulness or honest representation of financial facts - have been addressed in 2023 with a tighter adherence to internal timelines. Management is confident the 2023 audit will bear out this reality.