BANG ON A CAN INC.Non-Profit

2025-001: Accounting Records Not Maintained on the Accrual Basis Condition: Overall recordkeeping procedures and the Organization’s accounting records are not maintained on the accrual basis of accounting. Material adjustments were required as part of the audit to reverse prior period receivables and accrued expenses, and to record current year receivables and accrued expenses. A material adjustment was also necessary to correct for payroll expenses recorded in duplicate that resulted in an overstatement of payroll expenses and accrued expenses. Criteria: The presentation of financial statements in accordance with accounting principles generally accepted in the United States of America must be done on the accrual basis. The Uniform Guidance, 2 CFR Section 200, also requires that recipients of federal awards must account for and track expenditures using the accrual basis of accounting. Expenses must be recorded when goods are received or services are provided, or when the obligation is incurred, regardless of when cash is actually disbursed. Cause: Internal control procedures in place were not adequate to provide for financial reporting on the accrual basis of accounting. Effect: In absence of adequate internal controls over accounting and financial reporting on the accrual basis of accounting, expenditures allocated to federally funded programs may be misstated. Recommendation: Procedures should be implemented to provide for accounting and financial reporting on the accrual basis of accounting. Response: Management accepts the recommendation and is working to develop updated financial policies and procedures to maintain accounting records on the accrual basis of accounting.

Finding: 2025-002: Written Financial Management Policies and Procedures Condition: The Organization did not have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E for the year ended August 31, 2025. Criteria: The Organization is required to have written policies, procedures and standards of conduct in accordance with 2 CFR 200, Subparts D and E (2 CFR sections 200.300 and 200.400, respectively).Cause: Management was not aware of the requirement under 2 CFR 200, Subparts D and E requiring the Organization to have written policies, procedures and standards of conduct. Effect: While the Organization did not have written policies, procedures, or standards of conduct in accordance with 2 CFR 200, Subparts D and E during the year ended August 31, 2025, we are not aware of any instances of noncompliance with respect to activities allowed or unallowed, allowable costs/cost principles, cash management, period of performance or reporting. Recommendation: We recommend that management of the Organization adopt written policies, procedures and standards of conduct as required by 2 CFR 200, Subparts D and E. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual to meet Federal compliance requirements.

Finding: 2025-003: Documentation of Subrecipient Monitoring Condition: The Organization did not maintain documentation to demonstrate compliance with the requirements for subrecipient monitoring in accordance with 2 CFR 200, Subpart D for the year ended August 31, 2025. Criteria: The Organization is required to maintain documentation to demonstrate compliance with the requirements for subrecipient monitoring in accordance with 2 CFR 200, Subpart D (2 CFR section 200.332). Cause: Management was not aware of the requirement under 2 CFR 200, Subpart D requiring the Organization to maintain documentation to demonstrate compliance with the requirements for subrecipient monitoring. Effect: While the Organization did not maintain documentation to demonstrate compliance with the requirements for subrecipient monitoring in accordance with 2 CFR 200, Subpart D for the year ended August 31, 2025, the Organization provided a detailed description of the ongoing direct contact with the subrecipient to monitor its activities and compliance with regulations and terms of the prime and subawards. Recommendation: We recommend that management of the Organization adopt written policies procedures for maintaining documentation to demonstrate compliance with the requirements for subrecipient monitoring in accordance with 2 CFR 200, Subpart D. Response: Management accepts the recommendation and is working to develop an updated financial policies and procedures manual that provides for maintaining documentation to demonstrate compliance with the requirements for subrecipient monitoring to meet Federal compliance requirements.