THE OPEN DOOR/CAPE ANN FOOD PANTRY, INC.Non-Profit

Item # 2024-001 Valuation of Pledge Receivables (Significant Deficiency in Internal Control) Criteria: Under U.S. GAAP, long term pledge receivables are required to be discounted to net present value to ensure that they are properly stated under the accrual basis of accounting. Condition: During the year under audit, the Organization did not record the appropriate discount for long term pledge receivables. Cause: Management did not follow the requirements under U.S. GAAP for long term pledge receivables and did not take the necessary measures to ensure that the ending balance of long term pledge receivables was properly stated. Effect: Failure to update internal controls to comply with the requirements of U.S. GAAP could result in material misstatements of receivable balances. Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with U.S. GAAP. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout fiscal year 2025 to be in full compliance with U.S. GAAP and the Uniform Guidance. This exercise is anticipated to be complete by the end of fiscal year 2025.

Item # 2024-002 Prepaid Expenses (Significant Deficiency in Internal Control) Criteria: Under U.S. GAAP, expenses prepaid during the fiscal year should be recorded as an asset on the statement of financial position and amortized through the remainder of the fiscal year to ensure that they are properly stated under the accrual basis of accounting. Condition: During the year under audit, the Organization did not properly reconcile the ending balance of prepaid expenses in the general ledger. Cause: Management did not take the necessary measures to reconcile prepaid expense amounts through the fiscal year to the general ledger to ensure that the ending balance of prepaid expenses was properly stated. Effect: Failure to update internal controls to comply with the requirements of U.S. GAAP could result in material misstatements of prepaid expense balances. Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with U.S. GAAP. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout fiscal year 2025 to be in full compliance with U.S. GAAP and the Uniform Guidance. This exercise is anticipated to be complete by the end of fiscal year 2025.

Item # 2024-003 Reporting (Compliance Finding) Criteria: Per the grant agreement with the Department of Housing and Urban Development (HUD) the Organization must submit semi-annual performance and financial reports within 30 days of the reporting period end. Condition: Management did not submit the reports within the time period specified. Cause: Management was unaware of the thirty day deadline submit the required reports. Effect: The Organization is not in compliance with the federal award reporting requirements. Recommendation: The Organization should update its procedures to submit federal reports within the time period specified in the grant agreement. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout fiscal year 2025 to be in full compliance with federal award agreements and the Uniform Guidance. This exercise is anticipated to be complete by the end of fiscal year 2025.