North County LGBTQ Resource CenterNon-Profit

II. Financial Statement Findings 2024-001 Inadequate accounting and review procedures Repeat Finding: No Type of Finding: Material weakness Questioned Costs: $407,450 Criteria: Management is responsible for implementing review processes over transactions and financial statement close procedures. Condition: The Organizations’ internal controls are not adequate to ensure that accounting records, specifically related to deferred revenue, prepaid expenses, depreciation and net assets, are accurate and complete. Due to a lack of management oversight and review procedures, errors related to these areas were not identified and corrected in a timely manner. Cause: The internal controls over accounting processes and review procedures were not operating effectively. Effect: Material errors regarding deferred revenue, prepaid expenses, depreciation and net assets were not detected or corrected by management in a timely manner by management. Recommendation: We recommend that the Organization strengthen its internal control over accounting process. Management should conduct a thorough review regularly to ensure accurate reporting for deferred revenue, prepaid expenses, depreciation and net assets. Management’s Response: The Organization concurs with the finding and has begun implementing corrective action to address the identified issues, including enhancing internal controls and strengthening review procedures to ensure more accurate and timely financial reporting going forward.