Family Development Services

Criteria: Management is responsible for establishing and maintaining effective internal controls over financial reporting. Condition: The Organization’s review of in-kind valuation is not operating as intended. Cause: The review process for in-kind does not include sufficient recomputing of in-kind values for volunteer time, verification of current market studies for in-kind space, or verification of current lease agreements. Effect: Though the Organization obtains periodic market valuations for leased space, the spreadsheets used to calculate the monthly in-kind values were not updated with the current market rates. In some cases, incorrect lease payments per the lease agreement were also incorrect. These miscalculations resulted in the value of in-kind space to be overstated by approximately $21,802. Additionally, we also found minor calculation errors when totaling and recording volunteer time. Recommendation: The Organization’s review process for valuing in-kind needs to be modified to require more extensive review of calculations.

FDS will modify our review process for valuing In-Kind. Additional monitoring of worksheets will be implemented. After the In-Kind Valuation worksheet is completed by the person responsible and submitted monthly to finance, there will be an additional monitoring review by finance of the In-Kind Valuation worksheets for accuracy. The Fiscal Year In-Kind Valuation worksheet will be reviewed by the Finance Director periodically and when updates and revisions occur. A written procedure will be developed to adhere to this Finding Corrective Action Plan.