PITTSBURGH BOTANIC GARDEN

FINDING: 2019-001 - General Ledger Maintenance and Reconciliation U.S. Department of Interior Abandoned Mine Land Reclamation (AMLR) Program 15.252 Condition: The Garden did not have sufficient controls in place to adequately maintain and reconcile the general ledger, revenue software, and the Net Assets with Donor Restrictions spreadsheet that tracks how donor/grantor funds were appropriately applied throughout the year. The impact of this condition on financial management decisions is indicated by the significant audit adjustments arising from the audit procedures performed over grants receivable, government grant revenue, construction in progress, and accrued expenses. Specifically, an adjustment of approximately $327,000 was necessary to record grants receivable and grant revenue related to the AMLR grant, an adjustment of approximately $355,000 was necessary to record grants receivable and grant revenue related to the RACP grant, an adjustment of approximately $513,000 was necessary to record construction in progress and accrued expenses related to the RACP grant and an adjustment of approximately $144,000 was necessary to record construction in progress and accrued expenses related to the Garden of the Five Senses construction project. We understand the Garden had not completed the closing process before the coronavirus pandemic hit. As a result of dealing with the above issues and dealing with the coronavirus pandemic, the Garden was not able to devote sufficient attention to closing the trial balance. Criteria: Under the Code of Federal Regulations (2 CFR ? 200.303), the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. A key tool in the internal control is the reconciliation of these accounts? source documents and financial reporting and analysis documents monthly to ensure timely recording of receivable and payable activity as well as accurate recognition of the effect on revenues and expenses associated with these accounts. Policies and procedures regarding general ledger maintenance should be designed and implemented in a manner that the transactions are properly supported, and errors or fraud can be detected and corrected in a timely manner. Effect: The lack of sufficient procedures regarding the appropriate timing of the recognition of grant revenue, receivables, and related payables and constructed assets results in the risk of errors or fraud occurring and not being detected. Also, management risks poor decision-making due to reliance on the asset, liability, revenue, and expense balances that likely contain errors that are not detected but are being used to manage the Garden on a day to day basis. Cause: The Garden does not ensure the recording of receivable and payable activity as well as accurate recognition of the effect on revenues and expenses associated with these accounts policies and procedures that are in place are executed and implemented correctly. Question costs: None Recommendation: We recommend that the Garden reconcile its grants receivable, government grants revenue, construction in progress, and accrued expenses accounts in a timely manner. Reconciliations of the accounts? source documents and financial reporting and analysis documents should be completed on a monthly basis to support and ensure that the accounts are properly stated. The review should ensure that the reconciliations are completed accurately and that the reconciled amounts agree to the general ledger. Views of responsible officials and planned corrective action: Management agrees with this finding; see the separate Corrective Action Plan.

Corrective Action Plan Name(s) of contact person(s) for corrective action: Debra Kindler, Accounting Manager Tim Kapela, Finance Director Keith Kaiser, Executive Director Corrective Action Planned: During the monthly closing process, the accounts noted in the finding will be addressed early in the closing process and will receive more time and attention. The Accounting Manager will prepare the reconciling items for each account with supporting invoices and any other necessary documents. These items will be reviewed by the Finance Director. This review will ensure that all supporting documentation is included. If additional information is needed, it will be reviewed by the Finance Director to expedite receipt of outstanding invoices or other supplemental information and to ensure timely recording. A monthly reconciliation log will be used to track these accounts to resolve reconciling items within 90 days. This reconciling process will be monitored by the Executive Director Anticipated Completion Date: This process will be implemented immediately. Views of responsible officials and planned corrective action: Management agrees with this finding. The coronavirus disrupted our normal closing processes. Because of the shutdown, there was limited access to hard copy files. During this time, management and members of the Board met through conference calls on a weekly basis to assess cash flow projections which took these accounts into consideration. We believe that this close monitoring of the Garden's cash position reduced the risk of poor decision making. Respectfully, Keith S. Kaiser Executive Director