Finding 8690 (2021-003)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2021
Accepted
2024-01-16

AI Summary

  • Core Issue: The Association failed to recognize revenues and receivables in the correct period for reimbursement-based programming.
  • Impacted Requirements: This violates U.S. GAAP, which requires revenue recognition when products or services are delivered.
  • Recommended Follow-Up: Implement controls to ensure timely and accurate recording of receivables in line with corresponding expenditures.

Finding Text

Criteria: Accounting principles generally accepted in the United States of America require that amounts be recognized as revenues, with corresponding receivables if applicable, when the product or service has been delivered to a customer and when the dollar amount is readily determinable. Condition: The Association’s controls were not effective to ensure it was recognizing revenues and related receivables for reimbursement‐based programming in the same period the expenditure occurred. We consider this internal control deficiency to be a significant deficiency. Context: Our procedures included examining subsequent cash receipts and vouching to expenditures made during the fiscal year, identifying several such receipts that should have been posted as receivables as of December 31, 2021 but were not. Cause: The Association typically records cash receipts on a cash basis instead of accrual basis as stipulated in U.S. GAAP. Effect: By not recording receivables in the correct period, revenues from reimbursement‐based awards could be materially misstated. Recommendation: We recommend the Association establish controls that allow for the timely and accurate recording of grants and contracts receivable from reimbursement‐based awards in the same period as their corresponding expenditures. View of Responsible Officials: There is no disagreement with this audit finding.

Categories

Internal Control / Segregation of Duties Cash Management Significant Deficiency

Other Findings in this Audit

  • 8676 2021-001
    Material Weakness
  • 8677 2021-002
    Significant Deficiency
  • 8678 2021-003
    Significant Deficiency
  • 8679 2021-004
    Significant Deficiency
  • 8680 2021-001
    Material Weakness
  • 8681 2021-002
    Significant Deficiency
  • 8682 2021-003
    Significant Deficiency
  • 8683 2021-004
    Significant Deficiency
  • 8684 2021-001
    Material Weakness
  • 8685 2021-002
    Significant Deficiency
  • 8686 2021-003
    Significant Deficiency
  • 8687 2021-004
    Significant Deficiency
  • 8688 2021-001
    Material Weakness
  • 8689 2021-002
    Significant Deficiency
  • 8691 2021-004
    Significant Deficiency
  • 8692 2021-001
    Material Weakness
  • 8693 2021-002
    Significant Deficiency
  • 8694 2021-003
    Significant Deficiency
  • 8695 2021-004
    Significant Deficiency
  • 585118 2021-001
    Material Weakness
  • 585119 2021-002
    Significant Deficiency
  • 585120 2021-003
    Significant Deficiency
  • 585121 2021-004
    Significant Deficiency
  • 585122 2021-001
    Material Weakness
  • 585123 2021-002
    Significant Deficiency
  • 585124 2021-003
    Significant Deficiency
  • 585125 2021-004
    Significant Deficiency
  • 585126 2021-001
    Material Weakness
  • 585127 2021-002
    Significant Deficiency
  • 585128 2021-003
    Significant Deficiency
  • 585129 2021-004
    Significant Deficiency
  • 585130 2021-001
    Material Weakness
  • 585131 2021-002
    Significant Deficiency
  • 585132 2021-003
    Significant Deficiency
  • 585133 2021-004
    Significant Deficiency
  • 585134 2021-001
    Material Weakness
  • 585135 2021-002
    Significant Deficiency
  • 585136 2021-003
    Significant Deficiency
  • 585137 2021-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.505 Affordable Care Act (aca) Maternal, Infant, and Early Childhood Home Visiting Program $110,512
93.600 Head Start $104,574
10.558 Child and Adult Care Food Program $14,144