Finding Text
Condition: IMPACT does not have a written fiscal procedure for the review of journal entries. The
Chief Financial Officer is responsible to preparing and posting journal entries to the general
ledger. IMPACT’s practice is the Chief Operating Officer would review and approve the journal
entries posted by the Chief Financial Officer. During the year ended September 30, 2022, journal
entries posted by the Chief Financial Officer were not reviewed and approved by the Chief
Operating Officer.
During the audit, Wipfli selected 16 journal entries to observe supporting documentation was
maintained for the journal entry. Supporting documentation as not maintained for 4 of the 16
entries. Management was able to reproduce the supporting documents.
The Chief Financial Officer is also an authorized check signer for the agency, has access to the
checks, and maintains the user rights within the accounting software. A segregation of duties
does not exist within the responsibilities of the Chief Financial Officer as this role has full access
to the accounting system, have physical access to IMPACT’s cash, and is an authorized check
signer.
Criteria or Specific Requirement: Uniform Guidance 200.303(a) states a non-federal entity must
“establish and maintain effective internal control over the Federal award that provides reasonable
assurance that the non-Federal entity is managing the Federal award in compliance with Federal
statutes, regulations, and the terms and conditions of the Federal award. These internal controls
should be in compliance with guidance in “Standards for Internal Control in the Federal
Government” issued by the Comptroller General of the United States and the “Internal Control
Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).”
Effect: A material weakness in internal control over financial reporting exists due to the lack of
reviews surrounding journal entries, missing supporting documentation for journal entries, and a
lack of segregations of duties within the Chief Financial Officer position.
Cause: Rapid growth of new funding without a corresponding increase in fiscal personnel has
resulted in additional responsibilities placed on the Chief Financial Officer and Chief Operating
Officer. The transition to remote working has also resulted in difficulties with handling electronic
documentation and approvals.
Auditor's Recommendation: We recommend IMPACT implement procedures surrounding the
journal entry review and approval process and review the duties assigned to the Chief Financial
Officer position.
View of Responsible Officials: Management agrees with the finding and has developed and
begun implementation of a corrective action plan.
Audit finding 2022-002 represents a material weakness in internal control over compliance for
IMPACT Community Action Partnership, Inc.'s major federal programs.