FAC Explorer

Finding 748 (2022-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-10-26
Audit: 1411
Organization: Downeast Transportation, Inc. (ME)
Auditor: Edwards Faust & Smith

AI Summary

  • Core Issue: Four buses from a federal grant were not recorded on the fixed asset list, leading to incomplete financial statements.
  • Impacted Requirements: This oversight violates U.S. generally accepted accounting principles regarding asset recognition and revenue reporting.
  • Recommended Follow-Up: Downeast Transportation should update their fixed asset records and ensure all grant-related assets are accurately reflected in future financial statements.

Finding Text

Downeast Transportation is responsible for the preparation of the basic financial statements and all accompanying information and the fair presentation in conformity with U.S. generally accepted accounting principles. This requires them to perform a year-end closing process to accumulate, reconcile and summarize information for inclusion in the annual financial statements. We identified that four (4) buses acquired from a federal grant were not properly recorded on the fixed asset list and related grant revenue. Therefore not included in the annual financial statements.

Corrective Action Plan

The organization has made various changes to personnel within the Finance Department as well as outsourcing of Finance Director duties to an outside CPA firm. These changes have increased the skills, knowledge and experience of the accounting department and as such, the understanding of the significance of recording non-cash assistance in the financial statements. As part of the closing process for the annual financial statements, the fixed asset listing will be reviewed for completeness and all federal grant assistance, both cash and non-cash, will be tied to revenue reported.

Categories

No categories assigned yet.

Other Findings in this Audit

  • 747 2022-001
    Significant Deficiency
  • 749 2022-003
    Significant Deficiency
  • 750 2022-004
    Significant Deficiency
  • 751 2022-005
    Significant Deficiency
  • 577189 2022-001
    Significant Deficiency
  • 577190 2022-002
    Significant Deficiency
  • 577191 2022-003
    Significant Deficiency
  • 577192 2022-004
    Significant Deficiency
  • 577193 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
15.954 National Park Service Conservation, Protection, Outreach, and Education $1.60M
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $1.50M
20.500 Federal Transit_capital Investment Grants $46,573
20.520 Paul S. Sarbanes Transit in the Parks $6,431
20.509 Formula Grants for Rural Areas and Tribal Transit Program $2,204