KEYSTONE COMMUNITY SERVICESNon-Profit

2020-001 Material Weakness in Internal Controls over Financial Reporting Condition: During our audit, adjustments were needed to adjust accounts to correct balances at year end. Significant accounts affected included net assets with donor restrictions and accounts receivable. Criteria: Management should have a procedure in place to verify the trial balance is complete with all accounts properly recorded. Cause: As a result of Cashe?s inability to run past reports and DHS?s inability to confirm outstanding balances, accounts receivable needed to be adjusted to agree to identified subsequent documentation relating to 2020 activity. Due to new multi-year pledges receivables in the current years as part of the new capital campaign, net asset with donor restrictions need to be increased to reflect these pledge receivables. Effect: The audit firm noted the misstatements and presented adjusting journal entries to correct during the audit. Recommendation: We recommend the Organization review and update its procedures related to net assets with donor restrictions and accounts receivable to ensure all activity is properly recorded.

2020-002 Noncompliance and Significant Deficiency in Internal Controls over Compliance Condition: During our audit procedures, we noted that some Income Eligibility Verification (IEV) forms could not be located. Criteria: Uniform Guidance requires that the Organization certify that households are eligible to receive USDA Foods for household consumption by applying income eligibility criteria. Cause: The Organization did not install signature pads during the period as planned due to other changes required at the food shelf associated with the COVID-19 pandemic, so they could not easily identify missing forms throughout the year. Some forms could have been missed when individuals came in to get food. Effect: The Organization could have provided food to non-eligible households. Recommendation: We recommend that the Organization review and update their procedures to ensure all required IEV forms are completed.

2019-001 Material Weakness in Internal Controls over Compliance and Financial Reporting Condition: The Organization did not track all of its federal expenditures in the aggregate. Criteria: Uniform Guidance requires proper tracking of federal expenditures to determine whether the Organization meets or exceeds the Single Audit threshold requirement. Cause: During our audit procedures, we noted that the Organization would not know to have a Single Audit performed if they had not received a letter from Second Harvest Heartland notifying the Organization that the $750,000 threshold had been exceeded. Effect: The Organization could have been required to have a Single Audit performed but not realize it. Recommendation: We recommend that the Organization track all federal expenditures in the aggregate each year to identify whether the $750,000 threshold for a Single Audit has been met or exceeded.

2019-002 Significant Deficiency in Internal Controls over Compliance Condition: During our audit procedures, we noted that a significant number of Income Eligibility Verification (IEV) forms could not be located. Criteria: Uniform Guidance requires that the Organization certify that households are eligible to receive USDA Foods for household consumption by applying income eligibility criteria. Cause: The Organization did not file the IEV forms in an organized way, making it difficult to locate specific forms. Some forms could have been missed when individuals came in to get food. Effect: The Organization could have provided food to non-eligible households. Recommendation: We recommend that the Organization implement devices to allow for electronic signatures on the IEV forms and connect these electronic forms to each individual within the Organization's database.

2019-003 Significant Deficiency in Internal Controls over Compliance Condition: During our audit procedures, we noted that the Organization did not maintain records of the distribution and inventory of USDA Foods. Criteria: Uniform Guidance requires that the Organization maintain accurate and complete records with respect to the distribution and inventory of USDA Foods. Cause: The Organization did not realize the requirement around maintaining records of the distribution and inventory of USDA Foods. Effect: The condition could result in the improper distribution or loss of USDA Foods. Recommendation: We recommend that the Organization performs an inventory count of USDA Foods at least annually.