BEHAVIORAL IDEAS LAB, INC. D/B/A IDEAS42Non-Profit

Finding 2021-001: Preparation of Financial Statements and Year-End Close Federal Programs: 98.001 Criteria: As noted in 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Condition: The 2021 consolidated financial statements were not prepared in a timely manner (during the year) as result of significant turnover during 2021 and 2022. The audit was significantly delayed based on the fact that management required additional time to properly complete its consolidated financial statements prior to the commencement of our fieldwork. Cause: ideas42 did not have the proper controls in place to ensure timely and accurate reporting during calendar year 2022 (due to turnover). Effect: Absent a proper reconciliation of all accounts on a monthly basis, in a timely manner, as well as the proper review and approval of account reconciliations, there exists the potential for reporting errors and the misappropriation of funds. Additionally, the financial reporting process may be significantly delayed (as experienced during the current year audit). Lastly, the submission of the 2021 Uniform Guidance report (and related data collection form) was completed after the U.S. Government deadline date. Questioned Costs: Not determined. Context: Our audit process commenced during July 2022 and did not conclude until March 2023. Multiple versions of consolidated financial statements were provided during that period of time, and numerous individuals were involved in ensuring the completeness of ideas42's books and records as well as the unaudited consolidated financial statements. Identified as a Repeat Finding, If Applicable: N/A Recommendation: We recommend all general ledger accounts be reconciled on a monthly basis throughout the year. These reconciliations should be reviewed in detail by an appropriate supervisor for accuracy and completeness, and the review process should be properly documented. Also, the preparation of financial statements should happen in a timely manner following the close of the quarter, and those should also undergo a documented management (and Board) review process.