Finding Text
Condition
Several features of the accounting system necessary to maintain information appropriate to produce
GAAP financial statements and facilitate grant compliance were not used, including:
• Accounts receivable
• Accounts payable
• Credit card reconciliations
• Review and approval routing of expenditures
• Separation of functional activities
Criteria:
Management should design the entity’s information system and related control activities over
technology to achieve objectives and respond to risks.
Cause
Management has not established and documented appropriate procedures for the use of its financial
information system.
Potential Effect of Condition
Management may make improper decisions or submit improper reports to grantor agencies based upon
incomplete or incorrect data. Expenses may not be adequately captured for timely reimbursement,
unallowable expenses may not be detected and corrected timely.
Recommendation
Management should seek training or other means to improve their understanding of their accounting
software and implement formal accounting procedures which take advantage of their software and
facilitate better grant reporting and compliance.
Management Response
See corrective action plan attached to the end of this report.