Finding Text
Finding 2022-001: Correction of Prior Year Error
Criteria: The YMCA should have adequate internal controls over financial reporting such that material misstatements of the financial statements would be prevented, detected and corrected on a timely basis.
Condition: The YMCA had a prior period adjustment to correct balances, including the understatement of previously reported accounts receivable and understatement of net assets as of December 31, 2021.
Cause: The YMCA presents as revenue during the year 2022 invoices that corresponds to services provided during the year 2021, resulting in the understatement of prior year accounts receivables.
Effect or Potential Effect: Net assets were restated as of January 1, 2022, for the correction of the error. This finding is a material weakness in internal control over financial reporting.
Recommendation: We recommend that Reporting Area YMCA improve its controls over financial reporting to prevent, detect and correct material misstatements of the financial statements on a timely basis.