Finding Text
Condition: During our audit, we noted that the internal control system does not include a process
for preparing the annual audited financial statements, the related disclosures and
schedule of expenditures of federal awards in accordance with GAAP. Criteria: Management is responsible for establishing and maintaining internal controls and for
the fair presentation of the financial position, change in net position, disclosures in the
financial statements, and schedule of expenditures of federal awards, in conformity
with U.S. Generally Accepted Accounting Principles (GAAP). Cause: Management requested that KerberRose SC assist in preparing a draft of the audited
financial statements, including the related footnote disclosures and schedule of
expenditures of federal awards. The outsourcing is a result of management’s
cost/benefit decision to use our accounting expertise rather than incurring this internal
resource cost. Effect: Although the auditors are preparing the financial statements, related footnotes, and
schedule of expenditures of federal awards, management of the Organization
thoroughly reviews them and accepts responsibility for their completeness and
accuracy. Recommendation: We recommend that management continues to make this decision on a cost/benefit
basis. Management's Response: Due to limited staffing the Organization will continue to contract with an outside audit
firm to complete the statements. Management reviews the financial statements and
compares to the Organization’s financial records for completeness and accuracy and
accepts responsibility for those financial statements.