Wisconsin Women's Business Initiative Corporation

Finding 2024-002: Preparation of the Schedule of Expenditures of Federal Awards Condition: During our audit, Wipfli LLP noted there were certain federal grants received from pass-through entities that were inadvertently excluded from the Schedule of Expenditures of Federal Awards. Criteria: Uniform Guidance (2 CFR Part 200, section 510) states the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended. Cause: The internal controls of Wisconsin Women's Business Initiative Corporation did not identify all federal awards to be included in the Schedule of Expenditures of Federal Awards prior to the audit. Effect: As a result of the financial reporting matters identified in the condition paragraph, a significant deficiency exists in Wisconsin Women's Business Initiative Corporation's internal control over financial reporting. Recommendation: We recommend Wisconsin Women's Business Initiative Corporation continue to implement procedures to provide sufficient internal control over the preparation of the Schedule of Expenditures of Federal Awards. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan. This finding represents a significant deficiency in internal controls over compliance and a non-material non-compliance with the reporting requirement for the major federal programs. Questioned Costs: None Condition: During our audit, Wipfli LLP noted there were certain federal grants received from pass-through entities that were inadvertently excluded from the Schedule of Expenditures of Federal Awards. Criteria: Uniform Guidance (2 CFR Part 200, section 510) states the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended. Cause: The internal controls of Wisconsin Women's Business Initiative Corporation did not identify all federal awards to be included in the Schedule of Expenditures of Federal Awards prior to the audit. Effect: As a result of the financial reporting matters identified in the condition paragraph, a significant deficiency exists in Wisconsin Women's Business Initiative Corporation's internal control over financial reporting. Recommendation: We recommend Wisconsin Women's Business Initiative Corporation continue to implement procedures to provide sufficient internal control over the preparation of the Schedule of Expenditures of Federal Awards. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan.Major Programs: AL #14.218 Community Development Block Grant Cluster, Award Numbers CDBG FY 2024, FD 003 2023, CD5075180249, CDBG MKE RLF, CDBG Racine 2023-2024, CDBG FY 2023, B-23-UC-55-0003, ED 24020, 2024-2025 CDBG - Classic; AL #59.046 Microloan Program, Award Numbers SBAOCAML230534, SBAOCAML2024001568

A comprehensive Fiscal Policies and Procedures Manual will be developed that incorporates all required written procedures under 2 CFR 200 and defines internal controls and implementation processes. Accounting staff, and members of WWBIC's Compliance and Advancement teams, will receive training on the guidelines and requirements of the Schedule of Expenditures of Federal Awards (SEFA). As Federal and State funding is approved, WWBIC will flag the related accounts during set up to ensure that they are marked to be included in the SEFA. WWBIC will contact our auditors with possible questions before compiling and finalizing the SEFA.

Finding 2024-003: Loan Receivable Reconciliation Condition: During our audit, Wipfli LLP noted the software used to track loan activity was not fully reconciled to the loan receivable general ledger account detail for the years ended December 31, 2024 and 2023. The Ventures software did not reconcile to the general ledger for the years ended December 31, 2024 and 2023 primarily due to receipt and disbursement information not being entered to Ventures in a timely manner. Through testing of loan balances by confirmation and alternative procedures, several loans reviewed did not reconcile to the balance noted in Ventures due to delay in reconciliation of payment information after year end and additional charge-offs noted through subsequent review by management. Management was not able to produce a schedule of future maturities and accrued interest on loans receivable through the Ventures software due to software limitations. Criteria: Internal controls are effective if they are properly designed and implemented to prevent or detect account misstatements prior to the audit. Cause: Wisconsin Women's Business Initiative Corporation transitioned to a new loan management software during the year and there were challenges in reconciling the activity to the general ledger. Effect: As a result of the financial reporting matters identified in the condition paragraph, a material weakness exists in Wisconsin Women's Business Initiative Corporation's internal control over financial reporting. Recommendation: We recommend Wisconsin Women's Business Initiative Corporation continue to implement perform Reconciliations between the loan software and the general ledger on a monthly basis to address any reconciling items in a more timely manner. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan. This finding represents a material weakness in internal controls over compliance and a non-material non-compliance with the reporting requirement for the major federal programs. Questioned Costs: None Major Programs: AL #14.218 Community Development Block Grant Cluster, Award Numbers CDBG FY 2024, FD 003 2023, CD5075180249, CDBG MKE RLF, CDBG Racine 2023-2024, CDBG FY 2023, B-23-UC-55-0003, ED 24020, 2024-2025 CDBG - Classic; AL #59.046 Microloan Program, Award Numbers SBAOCAML230534, SBAOCAML2024001568

WWBIC is working with the software developer to have necessary reports available such as interest accrual and maturities calculations as part of the system. Accounting staff will be implementing a new loan tracking coding segment in their general ledger software, ABILA MIP, that will track each loan transaction by loan number. This will allow MIP system to be reconciled to the loan software, Ventures monthly using automated reconciliations. Staff in both the accounting and the loan operations areas will be trained to use this coding. Reports that are time sensitive in the loan system will be set to run automatically so that balances can be captured. The accounting staff are now coordinating these processes with WWBIC's loan operations to make sure that the processes capture all activity and reconcile between the two systems.

Criteria: The Organization utilizes a subsidiary system to maintain and monitor loan account balances. The subsidiary system should be reconciled on a regular basis to the general ledger control accounts. Condition: The loan receivable balances in the general ledger were not fully reconciled to the subsidiary system during the year. Cause: The Organization experienced a personnel turnover during the year which resulted in certain account reconciliations to be partially completed, and certain accounting processes and reconciliations were behind schedule. Reconciling items and differences were not identified and resolved in a timely manner. Effect: Without timely reconciliation procedures, loans receivable could be incorrectly reported in the financial statements. Questioned costs: No questioned costs were identified. Prevalence or consequence: Partial reconciliation of loan balances was performed, however the full reconciliation was completed during the audit process. Repeated audit finding: This is not a repeat finding. Recommendation: We recommend that reconciliations of loans receivable be completed on a monthly basis including identifying and correcting all reconciling items. The reconciliations should be reviewed and approved by management.

We concur with the assessment noted by the auditor.  During 2023 there was significant staff turnover in the department which led to a significant delay in reconciling certain account and their related balances in a timely manner. We will continue to further review and augment staffing levels, continue our cross-training efforts, and reestablish internal account reconciliations of accounts, especially for the grants receivable, loans receivable and cash and related bank accounts.  We will also refine our internal accounting checklists, work to ensure proper training of the accounting team, and have a responsible individual review and ensure account reconciliations are completed in a timely manner.