Finding Text
2023-003: Payroll Accrual
Material Weakness
Criteria: Management is responsible for establishing and maintaining an effective system of internal control over financial reporting. Ensuring accruals and expenses are recorded in the appropriate time period and meet the criteria for recognition is a key component of effective internal control over financial reporting.
Condition: Certain expenses were not recorded in the correct financial reporting period.
Cause: The Organization did not have adequate internal controls to ensure accounts accruals and expenses were appropriately recorded.
Effect: The following errors were noted:
• Understatement of payroll related accruals by $233,877
• Understatement of payroll related expenses by $152,149
• Overstatement of Net Assets by $81,728
Recommendation: We recommend the Organization enhance internal controls to ensure accruals and expenses are appropriately recorded.
Views of Responsible
Officials: iFoster, Inc. agrees with this finding; see corrective action plan.