International Council for Refugees and Immigrants IncNon-Profit

Significant Deficiency Criteria – Management is responsible for establishing and maintaining internal control. A good system of internal control provides for adequate segregation of duties so no one individual handles a transaction from its inception to completion. In order to maintain proper internal control, duties should be segregated so the authorization, custody and recording of transactions are not under the control of the same employee. This segregation of duties helps prevent losses from employee error or dishonesty and maximizes the accuracy of the organization’s financial statements. Conditions – The external auditor could not verify who reviewed or who approved certain transactions. Cause – The implemented formal review and approval process sometimes was not followed. Effect – Not consistently adhering to review and approval processes could impact the Organization’s ability to promptly identify and address potential misstatements, or errors that may arise during the course of regular operations. Repeat Finding – This was partially corrected. See finding 2023-001. Recommendation – The Organization should review its procedures to address significant oversights in internal controls and ensure all internal control processes are properly documented. When the Organization has a process to cross-check among two or more individuals, it should be properly documented by having the initial or signature of the 2nd individual.

Significant Deficiency Criteria – The Organization’s management has the responsibility to record, process, and summarize the accounting data to ensure that users of the data have complete and accurate accounting records. The Organization is also required to prepare financial statements in accordance with generally accepted accounting principles (GAAP). Condition – As a result of the current year auditing procedures, misstatements were identified that were not previously identified by the Organization’s internal controls over financial reporting. The entries include mainly adjustments to grants receivable, accrued payroll liabilities, and lease liabilities. Context – Management is responsible for the recording, processing, summarizing, and review of the accounting data (i.e. maintaining books and records) and for making the necessary adjustments to those books and records before the audit and preparation of the financial statements. Cause – The Organization needs a more thorough review processes for its year-end financial statements to ensure accuracy and completeness. Effect – Members of management using the Organization’s internal books and records may not have complete and accurate information at year-end if the year-end financial statements are not sufficiently reviewed. Repeat Finding – This was partially corrected. See finding 2023-002. Recommendation – We recommend that the Organization improve its procedures to review its internal books and records, make all required adjustments at year-end, and ensure that the information taken from the accounting records is complete and accurate. Additional resources should be utilized as necessary to ensure year-end account balances are adjusted to be in accordance with U.S. GAAP.