Finding 2023-001
material weakness
- Program
- LOW-INCOME HOME ENERGY ASSISTANCE (93.568)
- Compliance requirement
- Other
- FAC record
- FY2023 audit on fac.gov
Finding text from the filing
nternal control over financial reporting Criteria: An effect ve system of internal controls contemplates an adequate system for recording and processing entries material to the financial statements.
Condition: During our audit, we identified five (5) material audit adjustments. Consequently, a material misstatement would have occurred in the Organization’s financial statements.
Cause: While the Organization’s internal controls over financial reporting are appropriately designed, they were not fully implemented to prevent or detect material misstatements in the financial statements prepared according to U.S. Generally Accepted Accounting Principles (GAAP).
Effect: The Organization may fail to prevent or detect material misstatements in its financial statements.
Context: Adjustments were required to correct the following: • Cash • Grant receivables • Prepaid expenses • Buildings and construction in process • Right of use assets and liabilities • Notes Payable • Foundation and corporate grants • Other income • Accounts payable and expense Recommendation: We recommend that the Organization update its accounting manual to include a year-end checklist with standardized procedures for financial reporting and close processes. The audit committee should review and approve the financial statements and supplemental schedules before the audit begins. This will ensure that all necessary adjustments and disclosures are made to the financial statements for year-end reporting.
Status: Corrective action plan was created on August 12, 2024 in response to receiving the audit finding.