EIN: 421591205
UEI: KXNLLV3U8Z64
Data as of August 23, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 30, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 30, 2026 (129 days from today).
What is a management decision? →MBN maintains equipment records in its accounting records and in its inventory management system (BarCloud). At the time of testing, MBN was completing a planned transition of those records from physical binder-based files to a centralized BarCloud system; a related inventory review and reconciliation was still in progress. Because the accounting fixed asset schedule consists of a combination of grouped asset additions and individual assets, while the inventory management system maintains records at the individual asset level, and because the inventory management system did not yet contain information necessary to reconcile inventory records to the accounting record (including asset classifications and in-service dates), the records maintained within the two systems are not yet fully reconciled. During audit testing performed while this reconciliation was ongoing, discrepancies were identified between the systems, including assets recorded in one system but not the other. Cause: The discrepancies noted relate primarily to the timing of audit testing in relation to the organization-wide reconciliation effort then already underway. During fiscal year 2025, MBN began a comprehensive reconciliation of equipment records, transitioning from manual, binder-based files maintained at field locations to a centralized BarCloud inventory management system and the fixed asset schedule. At the same time, the company was engaged in a detailed review and reconciliation of its property and equipment records, and had begun implementing more stringent controls over management of Federally funded equipment. This substantial undertaking was conducted during a period of reduced staffing within the finance and accounting function. Given the volume of records, the level of effort required, and the fact that records originating in prior years (especially those overseas where offices had been closed and access was limited) required significant enhancement before they could be reconciled, the reconciliation effort remained in progress at the time of audit testing, and additional time was needed to complete it.Effect or Potential Effect: Because management’s reconciliation effort was still in progress at the time of testing, there was a temporary, transitional risk that Federally funded equipment records maintained in the two systems were not yet fully aligned, and that some discrepancies between accounting and inventory records had not yet been identified and resolved. This risk is inherent to the period during which legacy binder-based records are consolidated into a centralized system and reconciled, and is expected to diminish as management completes its remediation efforts. Questioned Costs: None Context: As part of our testing of equipment management requirements, the Organization reviewed its equipment tracking processes and the records maintained within both the accounting system and the BarCloud inventory management system. Testing was performed during a period in which management was actively reconciling records - including records maintained at closed overseas locations - into BarCloud, while also reconciling the two systems. We noted that the systems maintained different levels of detail which, at the time of testing, had not yet been fully reconciled. Limited testing of vehicle records identified assets recorded in one system that were not reflected in the other, which is consistent with the transitional state of the records. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management continue establishing and implementing procedures to maintain equipment records in a manner permitting reconciliation between the accounting records and the inventory management system. The procedures should include the establishment of a common asset identification methodology, the reconciliation of equipment records between systems on a periodic basis, the investigation and resolution of any discrepancies, and the maintenance of documentation supporting the reconciliation process. Additionally, management should continue evaluating whether additional information should be maintained within the inventory management system to facilitate reconciliation and support compliance with Federal equipment management requirements.
Show full finding ▾Hide full finding ▴Finding 2025-001 Fixed Asset Reconciliations and Management of Federally Funded Equipment - Significant Deficiency in Financial Reporting and Internal Control over Equipment and Compliance Finding Federal Agency(ies): United States Agency for Global Media Federal Program(s): International Broadcasting Independent Grantee Organizations Assistance Listing Number(s): 90.500 Pass-through Entity (if applicable): N/A Award Identification Number and Year: MN01-25-GO-00001 (2025) Criteria or Specific Requirement: 2 CFR 200.313(d) requires recipients to maintain property records for equipment acquired with Federal funds. Such records should include, among other items, a description of the property, serial number or other identification number, source of funding, acquisition date, cost, location, use and condition, and ultimate disposition data. Additionally, recipients are required to conduct physical inventories of equipment and reconcile the results of those inventories to the property records. Further, 2 CFR 200.303 requires recipients to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable Federal requirements. Condition: MBN maintains equipment records in its accounting records and in its inventory management system (BarCloud). At the time of testing, MBN was completing a planned transition of those records from physical binder-based files to a centralized BarCloud system; a related inventory review and reconciliation was still in progress. Because the accounting fixed asset schedule consists of a combination of grouped asset additions and individual assets, while the inventory management system maintains records at the individual asset level, and because the inventory management system did not yet contain information necessary to reconcile inventory records to the accounting record (including asset classifications and in-service dates), the records maintained within the two systems are not yet fully reconciled. During audit testing performed while this reconciliation was ongoing, discrepancies were identified between the systems, including assets recorded in one system but not the other. Cause: The discrepancies noted relate primarily to the timing of audit testing in relation to the organization-wide reconciliation effort then already underway. During fiscal year 2025, MBN began a comprehensive reconciliation of equipment records, transitioning from manual, binder-based files maintained at field locations to a centralized BarCloud inventory management system and the fixed asset schedule. At the same time, the company was engaged in a detailed review and reconciliation of its property and equipment records, and had begun implementing more stringent controls over management of Federally funded equipment. This substantial undertaking was conducted during a period of reduced staffing within the finance and accounting function. Given the volume of records, the level of effort required, and the fact that records originating in prior years (especially those overseas where offices had been closed and access was limited) required significant enhancement before they could be reconciled, the reconciliation effort remained in progress at the time of audit testing, and additional time was needed to complete it.Effect or Potential Effect: Because management’s reconciliation effort was still in progress at the time of testing, there was a temporary, transitional risk that Federally funded equipment records maintained in the two systems were not yet fully aligned, and that some discrepancies between accounting and inventory records had not yet been identified and resolved. This risk is inherent to the period during which legacy binder-based records are consolidated into a centralized system and reconciled, and is expected to diminish as management completes its remediation efforts. Questioned Costs: None Context: As part of our testing of equipment management requirements, the Organization reviewed its equipment tracking processes and the records maintained within both the accounting system and the BarCloud inventory management system. Testing was performed during a period in which management was actively reconciling records - including records maintained at closed overseas locations - into BarCloud, while also reconciling the two systems. We noted that the systems maintained different levels of detail which, at the time of testing, had not yet been fully reconciled. Limited testing of vehicle records identified assets recorded in one system that were not reflected in the other, which is consistent with the transitional state of the records. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that management continue establishing and implementing procedures to maintain equipment records in a manner permitting reconciliation between the accounting records and the inventory management system. The procedures should include the establishment of a common asset identification methodology, the reconciliation of equipment records between systems on a periodic basis, the investigation and resolution of any discrepancies, and the maintenance of documentation supporting the reconciliation process. Additionally, management should continue evaluating whether additional information should be maintained within the inventory management system to facilitate reconciliation and support compliance with Federal equipment management requirements.
Views of Responsible Officials: Management respectfully acknowledges the auditors’ observation regarding the reconciliation of the fixed asset schedule to the BarCloud inventory management system. However, management disagrees with the classification of this matter as a Significant Deficiency and wishes to provide the following context for the record. Throughout the close of fiscal year 2025, management dedicated substantial time and resources to a comprehensive review and reconciliation of the Organization’s fixed asset records. This was a deliberate, proactive initiative undertaken by the finance and accounting team to identify and resolve historical discrepancies between the accounting system and BarCloud, enhance the quality and completeness of asset-level records, and establish a stronger foundation for ongoing compliance with 2 CFR 200.313(d). The discrepancies noted by the auditors were, in large part, the very items identified and addressed through this reconciliation effort—not indicators of a systemic or ongoing control failure.As part of this undertaking, management initiated a comprehensive effort to migrate all equipment records from legacy, manual binder-based files maintained at field offices to a centralized online BarCloud system. This effort is now substantially complete. Because a number of these binders were maintained at MBN’s overseas bureaus, obtaining timely access to the physical records presented logistical challenges that required additional coordination and time to resolve. To support this work, MBN engaged local vendors in each country where equipment records were maintained to perform additional inventory review and reconciliation, as well as independent professionals to assess the fair market value of equipment identified for disposition and to perform the required data sanitization of IT equipment in accordance with 2 CFR 200. As a result of this work, the Organization now maintains materially clean and reconciled fixed asset records. The condition observed during audit testing reflects the state of records prior to the completion of management’s remediation efforts, not the current state of the Organization’s controls. Management believes that the effort expended to bring the records into alignment, and the improved control environment that now exists as a result, should be considered in the assessment of severity. Accordingly, management does not believe that the remaining matters, in the context of the substantial remediation completed, rise to the level of a Significant Deficiency. Management agrees with the auditors’ recommendation to continue formalizing procedures for ongoing reconciliation between the accounting records and BarCloud. Management is committed to establishing a common asset identification methodology, implementing a periodic reconciliation schedule, and maintaining supporting documentation to evidence the process going forward. We appreciate the auditors’ recognition of the significant undertaking completed during fiscal year 2025 and remain committed to maintaining full compliance with Federal equipment management requirements under 2 CFR 200.313(d) and 2 CFR 200.303.
FAC accepted this audit on October 31, 2025 — management decision was due May 1, 2026.
Prior to the start of our audit, the Organization noted that they had gone through an extensive balance sheet account cleanup process but had a few balance sheet accounts that had not yet been reconciled or cleaned and they were aware of adjustments that still needed to be made, but with the reduction in staff had not been able to address. The largest balance of these remaining accounts was the payroll accruals. As such, the Organization had not yet accrued payroll expenditures for the final pay period of the fiscal year. Additionally, it was confirmed that accrued payroll balances presented in the preliminary trial balance were related to prior year activity that was not accounted for properly. Such balances were adjusted during the audit, and a restatement of the opening net deficit was posted. Cause: At the end of the 2024 fiscal year, the Organization was in the midst of a restructuring, and did not have adequate resources in place in the finance and accounting department to properly review and reconcile the year end payroll accruals. This has now been corrected through the audit process. Effect or Potential Effect: Material errors with respect to year payroll accruals increase the risk that the financial statements as a whole, as well as the expenditures reported to USAGM, will not be presented correctly and also impacts the ability of management to make accurate financial decisions. However, the Organization knew what the correct balance should be so the ability to make accurate financial decisions was not impacted. Questioned Costs: NoneContext: The misstatement attributable to missed September 2024 payroll accruals was an understatement of expenses of approximately $2.48 million. The misstatement attributable to prior year activity was approximately $1 million (an increase in the net deficit). Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-001 and 2023-002 Recommendation: We recommend that management devote additional resources to the accounting and finance team to provide capacity for the implementation of thorough review and reconciliation process during year-end close.
Show full finding ▾Hide full finding ▴Finding 2024-001: Payroll Accruals - Material Weakness in Internal Controls over Financial Reporting and Internal Control over Federal Programs and Compliance Finding Federal Agency(ies): United States Agency for Global Media Federal Program(s): International Broadcasting Independent Grantee Organizations Assistance Listing Number(s): 90.500 Pass-through Entity (if applicable): N/A Award Identification Number and Year: MN01-24-GO-00001 (2024) Criteria or Specific Requirement: The general standards for internal controls over financial reporting set forth the objective of a system of internal control that provides for management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. Additionally, 2 CFR 200.303 Internal Controls states that recipients must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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: Prior to the start of our audit, the Organization noted that they had gone through an extensive balance sheet account cleanup process but had a few balance sheet accounts that had not yet been reconciled or cleaned and they were aware of adjustments that still needed to be made, but with the reduction in staff had not been able to address. The largest balance of these remaining accounts was the payroll accruals. As such, the Organization had not yet accrued payroll expenditures for the final pay period of the fiscal year. Additionally, it was confirmed that accrued payroll balances presented in the preliminary trial balance were related to prior year activity that was not accounted for properly. Such balances were adjusted during the audit, and a restatement of the opening net deficit was posted. Cause: At the end of the 2024 fiscal year, the Organization was in the midst of a restructuring, and did not have adequate resources in place in the finance and accounting department to properly review and reconcile the year end payroll accruals. This has now been corrected through the audit process. Effect or Potential Effect: Material errors with respect to year payroll accruals increase the risk that the financial statements as a whole, as well as the expenditures reported to USAGM, will not be presented correctly and also impacts the ability of management to make accurate financial decisions. However, the Organization knew what the correct balance should be so the ability to make accurate financial decisions was not impacted. Questioned Costs: NoneContext: The misstatement attributable to missed September 2024 payroll accruals was an understatement of expenses of approximately $2.48 million. The misstatement attributable to prior year activity was approximately $1 million (an increase in the net deficit). Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-001 and 2023-002 Recommendation: We recommend that management devote additional resources to the accounting and finance team to provide capacity for the implementation of thorough review and reconciliation process during year-end close.
Views of Responsible Officials: Management agrees and was fully aware of the situation it found itself in when funding was cut. The Organization was not able to keep enough staff employed during this time to review and correct these errors before the audit fieldwork began. Now that these historical balances have been corrected, the team undergoes a rigorous month-end close process where these issues will be caught and addressed immediately going forward.
2023-001, 2023-002
The fiscal year 2024 audit was not able to be commenced timely, and thus MBN was not able to complete the audit and file the Data Collection Form within nine months of the fiscal year-end. Cause: The primary cause of the delay was a disruption in funding attributable to changes at USAGM. MBN was temporarily unable to enter into a contract for audit services due to lack of available funding, and thus the commencement of the audit was delayed. Effect or Potential Effect: Noncompliance with Federal requirements with respect to reporting. Questioned Costs: None Context: The Data Collection Form for the year ended September 30, 2024 was not submitted to the Federal Audit Clearinghouse by the June 30, 2024 deadline.Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-003 Recommendation: While the circumstances leading to the delay in the 2024 audit were unforeseen, we recommend that going forward, management ensure that the annual audit planning process be prioritized and started within three months after fiscal year-end.
Show full finding ▾Hide full finding ▴Finding 2024-002: Late Filing of Data Collection Form - Material Weakness in Internal Control over Reporting and Compliance Finding Federal Agency(ies): United States Agency for Global Media Federal Program(s): International Broadcasting Independent Grantee Organizations Assistance Listing Number(s): 90.500 Pass-through Entity (if applicable): N/A Award Identification Number and Year: MN01-24-GO-00001 (2024) Criteria or Specific Requirement: In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditor's report or nine months after the end of the fiscal year, whichever comes first. Condition: The fiscal year 2024 audit was not able to be commenced timely, and thus MBN was not able to complete the audit and file the Data Collection Form within nine months of the fiscal year-end. Cause: The primary cause of the delay was a disruption in funding attributable to changes at USAGM. MBN was temporarily unable to enter into a contract for audit services due to lack of available funding, and thus the commencement of the audit was delayed. Effect or Potential Effect: Noncompliance with Federal requirements with respect to reporting. Questioned Costs: None Context: The Data Collection Form for the year ended September 30, 2024 was not submitted to the Federal Audit Clearinghouse by the June 30, 2024 deadline.Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-003 Recommendation: While the circumstances leading to the delay in the 2024 audit were unforeseen, we recommend that going forward, management ensure that the annual audit planning process be prioritized and started within three months after fiscal year-end.
Views of Responsible Officials: Management agrees and if funding had not stopped, audit fieldwork was originally slated to begin April 1st which would have allowed for timely completion. We fully intend to complete our FY25 audit well before the nine-month deadline.
2023-003
During fiscal year 2024, MBN reported disposals of Federally funded property and equipment with a cost basis of approximately $3.1M. While we noted that the book value of the disposed equipment was zero, as it had been fully depreciated, we were unable to determine whether MBN conducted a fair market value assessment of the disposed items, or whether MBN submitted a request for disposition instructions to USAGM related to such property and equipment. Cause: MBN did not have adequate internal controls or resources in place to ensure compliance, due in part to the Organization's restructuring and downsizing. Effect or Potential Effect: Potential noncompliance with the equipment reporting requirements of USAGM Questioned Costs: None Context: As noted above, the total disposals reported in the financial statements during FY 2024 were approximately $3.1M at cost basis. Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-004Recommendation: We recommend that in the future, MBN implement a process whereby equipment dispositions are only posted to the accounting system after the preparation and submission of disposition requests to USAGM, and that the items disposed of be specifically identified both in the disposition request, and in the equipment subledger, such that the two can be directly reconciled.
Show full finding ▾Hide full finding ▴Finding 2024-003: Disposition of Property and Equipment (Material Weakness in Internal Controls over Equipment and Compliance Finding) Federal Agency(ies): United States Agency for Global Media Federal Program(s): International Broadcasting Independent Grantee Organizations Assistance Listing Number(s): 90.500 Pass-through Entity (if applicable): N/A Award Identification Number and Year: MN01-24-GO-00001 (2024) Criteria or Specific Requirement: MBN's Federal award requires that requests for disposition instructions concerning property purchased with Grant Funds with an estimated fair market value (at the time of such disposition) of U.S. $5,000 or more must be submitted to USAGM 7 days in advance of the proposed disposition. Condition: During fiscal year 2024, MBN reported disposals of Federally funded property and equipment with a cost basis of approximately $3.1M. While we noted that the book value of the disposed equipment was zero, as it had been fully depreciated, we were unable to determine whether MBN conducted a fair market value assessment of the disposed items, or whether MBN submitted a request for disposition instructions to USAGM related to such property and equipment. Cause: MBN did not have adequate internal controls or resources in place to ensure compliance, due in part to the Organization's restructuring and downsizing. Effect or Potential Effect: Potential noncompliance with the equipment reporting requirements of USAGM Questioned Costs: None Context: As noted above, the total disposals reported in the financial statements during FY 2024 were approximately $3.1M at cost basis. Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-004Recommendation: We recommend that in the future, MBN implement a process whereby equipment dispositions are only posted to the accounting system after the preparation and submission of disposition requests to USAGM, and that the items disposed of be specifically identified both in the disposition request, and in the equipment subledger, such that the two can be directly reconciled.
Views of Responsible Officials: Management understands and agrees. Unfortunately, this issue was identified late into FY24 when the FY23 audit was being completed so the issue persisted into FY24. From the corrective action plans taken from the FY23 audit and desk review, this issue has been addressed and resolved in early FY25. MBN currently has an SOP regarding fixed assets that is already implemented. To address these concerns, MBN updated the SOP to include a clear process for equipment disposals, specifically for assets with a fair market value over $10,000, in accordance with Uniform Guidance. This update will ensure that all disposals are properly documented, and appropriate notifications are made to USAGM. We would like to confirm that the equipment disposal forms have already been updated to ensure that all necessary responses are reviewed and accurately completed as part of the notification process for disposals. Furthermore, we have strengthened our tracking, reporting and disposal processes to ensure the final disposition of equipment, including salvage value, is appropriately recorded.
2023-004
FAC accepted this audit on November 1, 2024 — management decision was due May 1, 2025.
During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct rent and other expenses and prepaid expenses, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded which decreased property and equipment by approximately $7,000,000, increased accounts payable and accrued expenses by approximately $2,100,000, decreased refundable advances by $25,300,000, and increased government grant revenue and various expenses by approximately $25,300,000. There were also adjustments to correct the classification of various expenses and liabilities.
Show full finding ▾Hide full finding ▴During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct rent and other expenses and prepaid expenses, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded which decreased property and equipment by approximately $7,000,000, increased accounts payable and accrued expenses by approximately $2,100,000, decreased refundable advances by $25,300,000, and increased government grant revenue and various expenses by approximately $25,300,000. There were also adjustments to correct the classification of various expenses and liabilities.
It was recommended that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. Furthermore, it was recommended that the Organization enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained.
2022-001
Finding 2023-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the Schedule of Expenditures of Federal Awardsa for ALN 90.500 were understated by approximately $24,673,000. This is a repeat of finding 2022-004.
Show full finding ▾Hide full finding ▴Finding 2023-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the Schedule of Expenditures of Federal Awardsa for ALN 90.500 were understated by approximately $24,673,000. This is a repeat of finding 2022-004.
It was recommended that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. Furthermore, it was recommended that the Organization enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained.
2022-004
The Data Collection Form for the year ended September 30, 2023, was not submitted to the Federal Audit Clearinghouse by the June 30, 2024 deadline.
Show full finding ▾Hide full finding ▴The Data Collection Form for the year ended September 30, 2023, was not submitted to the Federal Audit Clearinghouse by the June 30, 2024 deadline.
It was recommended that the Organization enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met.
2022-005
Property and equipment: The Organization failed to notify USAGM regarding approximately $7,112,000 of property and equipment disposals. Procurement: The Organization failed to notify USAGM prior to entering into contract with value of $695,161.
Show full finding ▾Hide full finding ▴Property and equipment: The Organization failed to notify USAGM regarding approximately $7,112,000 of property and equipment disposals. Procurement: The Organization failed to notify USAGM prior to entering into contract with value of $695,161.
It was recommended that the Organization enhance its internal controls, policies and procedures to ensure that all required notifications are being executed.
FAC accepted this audit on March 7, 2024 — management decision was due September 7, 2024.
Finding 2022-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for ALN 90.500 were overstated by approximately $10,428,000. This is a repeat of finding 2021-004. Criteria As part of the Corporation’s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct rent and other expenses and prepaid expenses, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded by the Corporation which decreased prepaid expenses by approximately $985,000, increased property and equipment by approximately $13,153,000, increased accounts payable and accrued expenses by approximately $1,739,000, increased refundable advances by $10,428,000, and decreased government grant revenue and various expenses by approximately $10,428,000. There were also adjustments to correct the classification of various expenses and liabilities. The amounts reported on the consolidated financial statements included these adjustments to correct and reconcile the balances as of and for the year ended September 30, 2022. Cause The limited number of staff and turnover within the accounting department restricted the Corporation’s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year as well as the current year audit. In addition, in February 2023, the Corporation had a ransomware attack which required the Corporation to restore the financial activity from a back-up and some of the account reconciliations had to be recreated. Effect This could lead to inaccurate financial information, on the basis of which the Corporation’s decisions are made. In addition, it is not allowing the Corporation to complete its audit in a timely manner and by the due date required by the Uniform Guidance, which is 9 months after the Corporation’s year end. Repeat Finding Yes, this is a repeat of finding 2021-001. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that were added during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding 2022-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for ALN 90.500 were overstated by approximately $10,428,000. This is a repeat of finding 2021-004. Criteria As part of the Corporation’s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct rent and other expenses and prepaid expenses, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded by the Corporation which decreased prepaid expenses by approximately $985,000, increased property and equipment by approximately $13,153,000, increased accounts payable and accrued expenses by approximately $1,739,000, increased refundable advances by $10,428,000, and decreased government grant revenue and various expenses by approximately $10,428,000. There were also adjustments to correct the classification of various expenses and liabilities. The amounts reported on the consolidated financial statements included these adjustments to correct and reconcile the balances as of and for the year ended September 30, 2022. Cause The limited number of staff and turnover within the accounting department restricted the Corporation’s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year as well as the current year audit. In addition, in February 2023, the Corporation had a ransomware attack which required the Corporation to restore the financial activity from a back-up and some of the account reconciliations had to be recreated. Effect This could lead to inaccurate financial information, on the basis of which the Corporation’s decisions are made. In addition, it is not allowing the Corporation to complete its audit in a timely manner and by the due date required by the Uniform Guidance, which is 9 months after the Corporation’s year end. Repeat Finding Yes, this is a repeat of finding 2021-001. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that were added during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
We acknowledge discrepancies in the submitted SEFA schedules for FY22. Efforts are underway to amend and submit a detailed updated SEFA that accurately aligns with our expenses to ensure compliance and accuracy in reporting federal awards.
2021-004
Criteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors’ report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that the Corporation’s financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended September 30, 2022 was not submitted to the Federal Audit Clearinghouse by the June 30, 2023 deadline. Cause There were delays in completing the 2022 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation. Effect Management did not fully adhere to the requirements of the Uniform Guidance. Repeat Finding Yes, this is a repeat of finding 2021-006. Questioned Costs None. Recommendation We recommend that the Corporation enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Criteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors’ report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that the Corporation’s financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended September 30, 2022 was not submitted to the Federal Audit Clearinghouse by the June 30, 2023 deadline. Cause There were delays in completing the 2022 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation. Effect Management did not fully adhere to the requirements of the Uniform Guidance. Repeat Finding Yes, this is a repeat of finding 2021-006. Questioned Costs None. Recommendation We recommend that the Corporation enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
In anticipation of the FY2024 audit, we are proactively preparing by reconciling all accounts monthly. Additionally, we have engaged an external auditor for the preparation of the FY23 audit to ensure an objective and thorough examination of our financial records.
2021-006
FAC accepted this audit on August 1, 2023 — management decision was due February 1, 2024.
Finding 2021-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 90.500 were overstated by approximately $5,347,000. There are no questioned costs required to be reported. Finding No. 2021-001: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting Criteria As part of the Corporation?s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct the accrued leave balance at year-end, correct prepaid and health insurance expense accounts, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded which decreased cash and cash equivalents by approximately 3,000; increased prepaid expenses by approximately $36,000, increased property and equipment by approximately $5,106,000; decreased accounts payable and accrued expenses by approximately $1,547,000; decreased deferred rent by approximately $252,000; increased refundable advances by $6,559,000, decreased government grant revenue by approximately $4,968,000; and decreased various expenses by approximately $5,347,000. There were also adjustments to correct the classification of various expenses and liabilities during the year. This resulted in multiple adjustments proposed by Marcum and the Corporation?s management that took place between June 2022 and January 2023 to correct and reconcile the balances as of September 30, 2021. Cause The limited number of staff and turnover within the accounting department restricted the Corporation?s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year as well as the current year audit. Effect This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions are made. In addition, it is not allowing the Corporation to complete its audit in a timely manner and by the due date required by the Uniform Guidance, which is 9 months after the Corporation?s year end. Repeat Finding Yes, this is a repeat of 2020?s finding. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that were added during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained.
Show full finding ▾Hide full finding ▴Finding 2021-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 90.500 were overstated by approximately $5,347,000. There are no questioned costs required to be reported. Finding No. 2021-001: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting Criteria As part of the Corporation?s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct improperly expensed fixed assets and correct depreciation expense, correct the accrued leave balance at year-end, correct prepaid and health insurance expense accounts, correct payroll and other benefits expenses and accruals, and correct government grants revenue and the related refundable advance balances. As a result, net adjustments were recorded which decreased cash and cash equivalents by approximately 3,000; increased prepaid expenses by approximately $36,000, increased property and equipment by approximately $5,106,000; decreased accounts payable and accrued expenses by approximately $1,547,000; decreased deferred rent by approximately $252,000; increased refundable advances by $6,559,000, decreased government grant revenue by approximately $4,968,000; and decreased various expenses by approximately $5,347,000. There were also adjustments to correct the classification of various expenses and liabilities during the year. This resulted in multiple adjustments proposed by Marcum and the Corporation?s management that took place between June 2022 and January 2023 to correct and reconcile the balances as of September 30, 2021. Cause The limited number of staff and turnover within the accounting department restricted the Corporation?s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year as well as the current year audit. Effect This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions are made. In addition, it is not allowing the Corporation to complete its audit in a timely manner and by the due date required by the Uniform Guidance, which is 9 months after the Corporation?s year end. Repeat Finding Yes, this is a repeat of 2020?s finding. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that were added during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained.
The Corporation has procedures in place for the review and approval of all schedules, journal postings, reconciliations, etc. However, the Corporation continues to experience a staffing shortage. In 2021 Corporation hired an additional Sr. Accountant but has been unable to fill or keep filled its International Payroll Accountant position. The Corporation found it necessary to use its Sr. Accountants to cover international payroll processing taking away resources from and delaying the timeliness of account reconciliations activities. A new International Payroll Accountant will join the Corporation on August 1, 2023. The Corporation is still seeking a Controller and Financial Analyst. To combat the staffing shortage, in late 2022 the Corporation hired a CPA firm to provided additional accounting support. This firm provides account reconciliation, process improvements and policy review assistance. The Corporation will continue to retain the firm?s services through December 2023 and perhaps beyond.
2020-002
Criteria The Corporation is required to have a formal, written procurement process, specifically, for acquisitions exceeding the micro-purchase threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the Corporation. In addition, the Corporation is required to ensure a covered transaction is not debarred, suspended, or otherwise excluded. Condition and Context We noted the following instances of noncompliance with the procurement compliance requirements under the Uniform Guidance and/or the Corporation?s procurement policy: (1) 15 procurement samples out of 40 samples did not have the required suspension and debarment search documentation, (2) five procurement samples out of 40 samples do not have adequate documentation of the selection process used to select the vendors, and (3) eight samples out of 40 samples were determined to be sole sourced but the Corporation did not retain documentation of the sole source justification at the time of procurement. Cause There is limited number of staff and turnover within the accounting and procurement departments, and therefore the procurement policy was not fully followed in terms of documentation of selection process, sole source documentation and verification of compliance with suspension and debarment. Effect The Corporation is not in compliance with the procurement requirements of the grant agreement and OMB Uniform Guidance, and the Corporation may enter into contracts with entities that are suspended or debarred, and impact the ability to continue the federal program. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation implement specific internal control procedures and controls to ensure compliance with applicable federal regulations and suspension and debarment for vendors with whom covered transactions may be made. In addition, we recommend that the Corporation consider using a procurement checklist for each qualifying purchase to ensure all requirements under the Uniform Guidance are followed, inclusive of competitive selection process, sole sourcing, search for suspension and debarment, cost analysis, and proper approvals and independent reviews.
Show full finding ▾Hide full finding ▴Criteria The Corporation is required to have a formal, written procurement process, specifically, for acquisitions exceeding the micro-purchase threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the Corporation. In addition, the Corporation is required to ensure a covered transaction is not debarred, suspended, or otherwise excluded. Condition and Context We noted the following instances of noncompliance with the procurement compliance requirements under the Uniform Guidance and/or the Corporation?s procurement policy: (1) 15 procurement samples out of 40 samples did not have the required suspension and debarment search documentation, (2) five procurement samples out of 40 samples do not have adequate documentation of the selection process used to select the vendors, and (3) eight samples out of 40 samples were determined to be sole sourced but the Corporation did not retain documentation of the sole source justification at the time of procurement. Cause There is limited number of staff and turnover within the accounting and procurement departments, and therefore the procurement policy was not fully followed in terms of documentation of selection process, sole source documentation and verification of compliance with suspension and debarment. Effect The Corporation is not in compliance with the procurement requirements of the grant agreement and OMB Uniform Guidance, and the Corporation may enter into contracts with entities that are suspended or debarred, and impact the ability to continue the federal program. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation implement specific internal control procedures and controls to ensure compliance with applicable federal regulations and suspension and debarment for vendors with whom covered transactions may be made. In addition, we recommend that the Corporation consider using a procurement checklist for each qualifying purchase to ensure all requirements under the Uniform Guidance are followed, inclusive of competitive selection process, sole sourcing, search for suspension and debarment, cost analysis, and proper approvals and independent reviews.
This matter is a carryover from the FY2020 audit. The instanced identified had already occurred before coming to the Corporation?s attention. The Corporation took immediate implementing stronger documentation procedures to expressly demonstrate the Corporation?s procurement compliance. The Procurement Policy was updated. Staff were given additional training and instruction. Some of the instance may persist at the beginning of FY2022. However, the Corporation will be able to show this has been fully addressed by September 30, 2022.
2020-003
Criteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors? report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that the Corporation?s financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended September 30, 2021 was not submitted to the Federal Audit Clearinghouse by the June 30, 2022 deadline. Cause There were delays in completing the 2021 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation. Effect Management did not fully adhere to the requirements of the Uniform Guidance. Questioned Costs None. Repeat Finding No. Recommendation We recommend that the Corporation enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met.
Show full finding ▾Hide full finding ▴Criteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors? report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that the Corporation?s financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended September 30, 2021 was not submitted to the Federal Audit Clearinghouse by the June 30, 2022 deadline. Cause There were delays in completing the 2021 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation. Effect Management did not fully adhere to the requirements of the Uniform Guidance. Questioned Costs None. Repeat Finding No. Recommendation We recommend that the Corporation enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met.
The Corporation acknowledges the need to meet the Data Collection Form reporting deadline.
FAC accepted this audit on March 30, 2022 — management decision was due September 30, 2022.
Finding No. 2020-002: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Finding 2020-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 19.500 were overstated by approximately $981,000. There are no questioned costs required to be reported. See Finding 2020-001 below: Finding No. 2020-001: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting Criteria As part of the Corporation?s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct beginning net assets and intercompany accounts, recognize expenses and reclassify improperly expensed fixed assets, correct the accrued leave balance at year-end, correct government grants revenue and the related refundable advance balances, and correct cash balances. As a result, net adjustments were recorded which decreased cash and cash equivalents by approximately $483,000; increased property and equipment by approximately $961,000; decreased prepaid expenses by approximately $98,000; decreased accounts payable and accrued expenses by approximately $365,000; decreased deferred rent by approximately $252,000; decreased refundable advances by $102,752,000, increased government grant revenue by approximately $102,593,000; and decreased various expenses by approximately $981,000. There were also adjustments to correct intercompany balances during the year. This resulted in multiple adjustments proposed by Marcum and the Corporation?s management that took place between January and November 2021 to correct and reconcile the balances as of September 30, 2020. Cause The limited number of staff and turnover within the accounting department restricted the Corporation?s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year. Effect This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions are made. Repeat Finding Yes, this is a repeat of 2018?s finding and an expansion of 2019?s finding. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that take place during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding No. 2020-002: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Finding 2020-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 19.500 were overstated by approximately $981,000. There are no questioned costs required to be reported. See Finding 2020-001 below: Finding No. 2020-001: Financial Close Process and Account Reconciliations ? Material Weakness in Internal Control Over Financial Reporting Criteria As part of the Corporation?s monthly and year-end closing procedures, the Corporation should ensure that account analysis and reconciliations are performed and all monthly and year-end adjustments are posted. In addition, management should review monthly and year-end financial reports to determine if there are any unusual balances that need to be investigated to ensure the completeness and accuracy of the accounting records. Condition and Context During the audit, there were several errors which would be expected to have been discovered during the financial close process or review of the financial reports. Adjustments were needed to correct beginning net assets and intercompany accounts, recognize expenses and reclassify improperly expensed fixed assets, correct the accrued leave balance at year-end, correct government grants revenue and the related refundable advance balances, and correct cash balances. As a result, net adjustments were recorded which decreased cash and cash equivalents by approximately $483,000; increased property and equipment by approximately $961,000; decreased prepaid expenses by approximately $98,000; decreased accounts payable and accrued expenses by approximately $365,000; decreased deferred rent by approximately $252,000; decreased refundable advances by $102,752,000, increased government grant revenue by approximately $102,593,000; and decreased various expenses by approximately $981,000. There were also adjustments to correct intercompany balances during the year. This resulted in multiple adjustments proposed by Marcum and the Corporation?s management that took place between January and November 2021 to correct and reconcile the balances as of September 30, 2020. Cause The limited number of staff and turnover within the accounting department restricted the Corporation?s ability to perform the necessary monthly and year-end reconciliations and review of the accounts in a timely manner. This resulted in delayed audits in previous years which delayed the reconciliations in the current year. Effect This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions are made. Repeat Finding Yes, this is a repeat of 2018?s finding and an expansion of 2019?s finding. Recommendation We recommend that, as part of the system of internal control over the monthly closing process, accounting staff be assigned to review the detailed schedules of liability and asset account reconciliations for accuracy and completeness and that any unusual balances, such as long-outstanding balances or negative balances, should be reviewed and adjustments posted. In addition, procedures should be established to ensure that costs related to property and equipment projects that take place during the year are properly classified. We also recommend that the Corporation implement any additional procedures needed to ensure that monthly reconciliations are a priority and are both completed and subsequently reviewed by an independent individual in a timely manner. Furthermore, we recommend that the Corporation enhance its procedures to ensure that the evidence of review of schedules and other reconciliations, such as sign-offs by both the preparer and reviewer on the documents, are retained. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
The Corporation is experiencing a staffing shortage at the accountant level. Recently the Corporation has hired an additional Sr. Accountant and is recruiting additional accounting personnel. Furthermore, the Corporation will amend its month end close procedures to provide express evidence of schedule and reconciliation review. The Corporation expects the improvements to be fully implemented by September 30, 2022.
2019-002
Finding No. 2020-003: Procurement ? Material Weakness in Internal Control Over Procurement U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Criteria The Corporation is required to have a formal, written procurement process, specifically, for acquisitions exceeding the micro-purchase threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the Corporation. In addition, the Corporation is required to ensure a covered transaction is not debarred, suspended, or otherwise excluded. Condition and Context We noted the following instances of noncompliance with the procurement compliance requirements under the Uniform Guidance and/or the Corporation?s procurement policy: (1) seven procurement samples out of 40 samples did not have the required suspension and debarment search documentation, (2) six procurement samples out of 40 samples do not have adequate documentation of the selection process used to select the vendors, (3) four procurement samples out of 40 samples did not follow the Corporation?s re-bidding policy and were overdue to be re-bid, (4) three samples out of 40 samples were determined to be sole sourced but the Corporation did not retain documentation of the sole source justification at the time of procurement. Cause There is limited number of staff and turnover within the accounting and procurement departments, and therefore the procurement policy was not fully followed in terms of documentation of selection process, sole source documentation and verification of compliance with suspension and debarment. Effect The Corporation is not in compliance with the procurement requirements of the grant agreement and OMB Uniform Guidance, and the Corporation may enter into contracts with entities that are suspended or debarred, and impact the ability to continue the federal program. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation implement specific internal control procedures and controls to ensure compliance with applicable federal regulations and suspension and debarment for vendors with whom covered transactions may be made. In addition, we recommend that the Corporation consider using a procurement checklist for each qualifying purchase to ensure all requirements under the Uniform Guidance are followed, inclusive of competitive selection process, sole sourcing, search for suspension and debarment, cost analysis, and proper approvals and independent reviews. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding No. 2020-003: Procurement ? Material Weakness in Internal Control Over Procurement U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Criteria The Corporation is required to have a formal, written procurement process, specifically, for acquisitions exceeding the micro-purchase threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the Corporation. In addition, the Corporation is required to ensure a covered transaction is not debarred, suspended, or otherwise excluded. Condition and Context We noted the following instances of noncompliance with the procurement compliance requirements under the Uniform Guidance and/or the Corporation?s procurement policy: (1) seven procurement samples out of 40 samples did not have the required suspension and debarment search documentation, (2) six procurement samples out of 40 samples do not have adequate documentation of the selection process used to select the vendors, (3) four procurement samples out of 40 samples did not follow the Corporation?s re-bidding policy and were overdue to be re-bid, (4) three samples out of 40 samples were determined to be sole sourced but the Corporation did not retain documentation of the sole source justification at the time of procurement. Cause There is limited number of staff and turnover within the accounting and procurement departments, and therefore the procurement policy was not fully followed in terms of documentation of selection process, sole source documentation and verification of compliance with suspension and debarment. Effect The Corporation is not in compliance with the procurement requirements of the grant agreement and OMB Uniform Guidance, and the Corporation may enter into contracts with entities that are suspended or debarred, and impact the ability to continue the federal program. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation implement specific internal control procedures and controls to ensure compliance with applicable federal regulations and suspension and debarment for vendors with whom covered transactions may be made. In addition, we recommend that the Corporation consider using a procurement checklist for each qualifying purchase to ensure all requirements under the Uniform Guidance are followed, inclusive of competitive selection process, sole sourcing, search for suspension and debarment, cost analysis, and proper approvals and independent reviews. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
The Corporation has a comprehensive procurement policy. The Corporations will implement stronger documentation procedures to expressly demonstrate the Corporation?s procurement compliance. The Corporation expects the improvements to be fully implemented by September 30, 2022.
Finding No. 2020-004: Reporting ? Significant Deficiency in Internal Control Over Reporting U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Criteria As part of the Corporation?s grant agreement, there are various reporting requirements that contain deadlines in which the Corporation must submit the requested information by. Condition and Context There were several instances in which the reporting deadlines were not met. There were two vacancy reports that were submitted multiple months after the specified due date. In addition, there was one monthly financial report submitted one business day past the due date. Cause The late submission of the vacancy reports was due to turnover within the human resource department. The late submission in the financial report was due to delays within the internal review process of the report prior to submission. Effect Delayed submission of reports may result in delay of funds and/or denial of future funding from USAGM. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation review their internal controls over reporting procedures and implement steps, such as calendar reminders and new staff training, to ensure that all necessary employees are aware of reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Show full finding ▾Hide full finding ▴Finding No. 2020-004: Reporting ? Significant Deficiency in Internal Control Over Reporting U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Criteria As part of the Corporation?s grant agreement, there are various reporting requirements that contain deadlines in which the Corporation must submit the requested information by. Condition and Context There were several instances in which the reporting deadlines were not met. There were two vacancy reports that were submitted multiple months after the specified due date. In addition, there was one monthly financial report submitted one business day past the due date. Cause The late submission of the vacancy reports was due to turnover within the human resource department. The late submission in the financial report was due to delays within the internal review process of the report prior to submission. Effect Delayed submission of reports may result in delay of funds and/or denial of future funding from USAGM. Questioned Cost None Repeat Finding No Recommendation We recommend that the Corporation review their internal controls over reporting procedures and implement steps, such as calendar reminders and new staff training, to ensure that all necessary employees are aware of reporting requirements. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
All monthly financial reports were submitted on time. The Corporation has a robust and reiterative review process. As to the vacancy reports, the Corporation was without an HR Director for several months. Upon the hiring of an HR Director the vacancy reports were brought up to date and have remained up to date since that time.
FAC accepted this audit on November 26, 2020 — management decision was due May 26, 2021.
Criteria: The Corporation should ensure that journal entries from account analysis and reconciliations of liability accounts are posted timely upon completion of the reconciliations. Condition and Context: The Corporation did not timely post adjusting journal entries after the reconciliations of the liability accounts were completed. During the audit, reconciliations for these accounts were submitted with adjustments that needed to be posted. The adjustments to these accounts should have been posted prior to the submission of the trail balance to the auditors. Adjustments were provided for accrued payroll expenses, year-end accrued leave balances, deferred rent liability, government grants and refundable advance balances, and the related expenses at year-end. As a result, net adjustments were recorded of approximately $501,000 to decrease prepaid expenses, approximately $935,000 to decrease accrued payroll and related taxes, approximately $982,000 to increase accrued leave and housing allowances, approximately $607,000 to decrease refundable advances, approximately $446,000 increase to deferred rent, approximately $51,000 to decrease government grant revenue, and approximately $994,000 to increase expenses. This resulted in post-audit journal entries to adjust year-end balances to the reconciled amounts. These adjustments were proposed by both Marcum and the Corporation?s management. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 19.500 were understated by approximately $994,000. There are no questioned costs required to be reported. Cause: With the staff changes following the 2019 audit, care was taken to adequately research the history of each account before finalizing reconciliations. Effect: This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions could be made. Repeat Finding: No. Recommendation: We recommend that, as part of the system of internal control over the monthly and annual closing process, accounting staff be assigned to review the detailed schedules of salary advances, accrued payroll and accrued leave accounts for accuracy and completeness. We also recommend that the Corporation implement any additional procedures needed to ensure that year-end reconciliations are a priority and the reconciliations are completed, reviewed and related adjustments posted in a timely manner. Views of Responsible Officials and Planned Corrective Actions: To the extent practical, the Corporation will make sure journal entries are posted monthly, biannually and/or annually depending on the nature of the account and prior to the start of audit.
Show full finding ▾Hide full finding ▴Criteria: The Corporation should ensure that journal entries from account analysis and reconciliations of liability accounts are posted timely upon completion of the reconciliations. Condition and Context: The Corporation did not timely post adjusting journal entries after the reconciliations of the liability accounts were completed. During the audit, reconciliations for these accounts were submitted with adjustments that needed to be posted. The adjustments to these accounts should have been posted prior to the submission of the trail balance to the auditors. Adjustments were provided for accrued payroll expenses, year-end accrued leave balances, deferred rent liability, government grants and refundable advance balances, and the related expenses at year-end. As a result, net adjustments were recorded of approximately $501,000 to decrease prepaid expenses, approximately $935,000 to decrease accrued payroll and related taxes, approximately $982,000 to increase accrued leave and housing allowances, approximately $607,000 to decrease refundable advances, approximately $446,000 increase to deferred rent, approximately $51,000 to decrease government grant revenue, and approximately $994,000 to increase expenses. This resulted in post-audit journal entries to adjust year-end balances to the reconciled amounts. These adjustments were proposed by both Marcum and the Corporation?s management. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 19.500 were understated by approximately $994,000. There are no questioned costs required to be reported. Cause: With the staff changes following the 2019 audit, care was taken to adequately research the history of each account before finalizing reconciliations. Effect: This could lead to inaccurate financial information, on the basis of which the Corporation?s decisions could be made. Repeat Finding: No. Recommendation: We recommend that, as part of the system of internal control over the monthly and annual closing process, accounting staff be assigned to review the detailed schedules of salary advances, accrued payroll and accrued leave accounts for accuracy and completeness. We also recommend that the Corporation implement any additional procedures needed to ensure that year-end reconciliations are a priority and the reconciliations are completed, reviewed and related adjustments posted in a timely manner. Views of Responsible Officials and Planned Corrective Actions: To the extent practical, the Corporation will make sure journal entries are posted monthly, biannually and/or annually depending on the nature of the account and prior to the start of audit.
Mr. Grant Turner Chief Financial Officer United States Agency for Global Media 330 Independence Avenue, SW Washington, DC 20237 Dear Mr. Turner, Middle East Broadcasting Networks, Inc. and Subsidiaries (collectively, the Corporation) submits the following corrective action plan for the year ended September 30, 2019. Independent Public Accounting Firm: MARCUM LLP 1899 L Street NW, Suite 850 Washington, DC 20036 Audit Period: The findings from the September 30, 2019 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS - FINANCIAL STATEMENT AUDIT Finding No. 2019-001: Reconciliations of Liability Accounts ? Significant Deficiency in Internal Control Over Financial Reporting Condition and Context: The Corporation did not timely post adjusting journal entries after the reconciliations of the liability accounts were completed. During the audit, reconciliations for these accounts were submitted with adjustments that needed to be posted. The adjustments to these accounts should have been posted prior to the submission of the trail balance to the auditors. Adjustments were provided for accrued payroll expenses, year-end accrued leave balances, deferred rent liability, government grants and refundable advance balances, and the related expenses at year-end. As a result, net adjustments were recorded of approximately $501,000 to decrease prepaid expenses, approximately $935,000 to decrease accrued payroll and related taxes, approximately $982,000 to increase accrued leave and housing allowances, approximately $607,000 to decrease refundable advances, approximately $446,000 increase to deferred rent, approximately $51,000 to decrease government grant revenue, and approximately $994,000 to increase expenses. This resulted in post-audit journal entries to adjust year-end balances to the reconciled amounts. These adjustments were proposed by both Marcum and the Corporation?s management. Recommendation: It was recommended that, as part of the system of internal control over the monthly and annual closing process, accounting staff be assigned to review the detailed schedules of salary advances, accrued payroll and accrued leave accounts for accuracy and completeness. It was also recommended that the Corporation implement any additional procedures needed to ensure that year-end reconciliations are a priority and the reconciliations are completed, reviewed and related adjustments posted in a timely manner. Action Taken: To the extent practical, the Corporation will make sure journal entries are posted monthly, biannually and/or annually depending on the nature of the account and prior to the start of audit. This is implemented/will be implemented beginning October 1, 2020. FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAM AUDIT Finding No. 2019-002: Reconciliations of Liability Accounts ?Significant Deficiency in Internal Control Over Compliance U.S. Agency for Global Media, CFDA No. 90.500, International Broadcasting Independent Grantee Organizations Finding 2019-001 is also a finding for the major federal award program audit as it impacted the expenses charged to the federal award above. Prior to the adjustments to correct the balances, the expenses reported on the SEFA for CFDA 19.500 were understated by approximately $994,000. There are no questioned costs required to be reported. If the U.S. Agency for Global Media has questions regarding this plan, please call me or Kim Jackson, CFO at kjackson@alhurra.com at (703) 852-9333.
FAC accepted this audit on August 26, 2019 — management decision was due February 26, 2020.
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