Finding 978349 (2023-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-06-25
Audit: 309829
Organization: New Endeavors by Women (DC)

AI Summary

  • Core Issue: Year-end financial schedules were incorrectly prepared, leading to significant adjustments and unreliable financial information.
  • Impacted Requirements: This violates CFR 200.302, which mandates effective control and accountability over funds and assets.
  • Recommended Follow-Up: Implement monthly account reconciliations and establish a supervisory review process to strengthen internal controls.

Finding Text

Finding 2023-001 Year-End Close Process/Account Reconciliations Information on the Federal Programs: ALN 14.235 Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management system of each non-Federal entity must provide for effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. Condition: The fiscal year-end schedules supporting various asset and liability accounts were incorrectly prepared and required revision, resulting in significant adjustments to NEW's unaudited financial statements. Multiple trial balances were received throughout the audit process. A significant amount of time was spent by management during the audit process reconciling accounts resulting in an audit delay. The delay resulted in additional audit work performed after the original end date of the initial field work. These issues most likely resulted in management and the Board reviewing unreliable internal financial information throughout the year, and this also represents a deficiency in adhering to NEW's internal control policies and procedures. Cause: A proper internal controls process, which would include a supervisory review and approval process (with physical or electronic evidence of such a process), was not in place during the fiscal year under audit.Effect or Potential Effect: Significant adjustments were proposed by management during the audit. Additionally, any internal financial statements produced by management during the year (and as of fiscal year-end) were not properly stated in relation to the financial statements taken as a whole (and therefore could not be relied upon). Questioned Costs: None Context: Our audit procedures consisted of an initial review of the financial statements and related supporting schedules, which led to management having to perform multiple subsequent reviews (and corrections) following attempts to correct earlier provided schedules and financial statements. The condition noted is deemed to be systematic in nature. Identification as a Repeat Finding, if Applicable: Finding 2022-001 Recommendation: We recommend that NEW ensure that each account is properly reconciled on a monthly basis.

Categories

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 401901 2023-001
    Material Weakness Repeat
  • 401902 2023-002
    Significant Deficiency Repeat
  • 401903 2023-003
    Significant Deficiency Repeat
  • 401904 2023-001
    Material Weakness Repeat
  • 401905 2023-002
    Significant Deficiency Repeat
  • 401906 2023-003
    Significant Deficiency Repeat
  • 401907 2023-001
    Material Weakness Repeat
  • 401908 2023-002
    Significant Deficiency Repeat
  • 401909 2023-003
    Significant Deficiency Repeat
  • 401910 2023-001
    Material Weakness Repeat
  • 401911 2023-002
    Significant Deficiency Repeat
  • 401912 2023-003
    Significant Deficiency Repeat
  • 978343 2023-001
    Material Weakness Repeat
  • 978344 2023-002
    Significant Deficiency Repeat
  • 978345 2023-003
    Significant Deficiency Repeat
  • 978346 2023-001
    Material Weakness Repeat
  • 978347 2023-002
    Significant Deficiency Repeat
  • 978348 2023-003
    Significant Deficiency Repeat
  • 978350 2023-002
    Significant Deficiency Repeat
  • 978351 2023-003
    Significant Deficiency Repeat
  • 978352 2023-001
    Material Weakness Repeat
  • 978353 2023-002
    Significant Deficiency Repeat
  • 978354 2023-003
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.235 Supportive Housing Program $161,182