Organic Crop Improvement Association International, Inc.Non-Profit

Material Audit Adjustments Information on the Federal Program: U.S. Department of the Agriculture, Plains Regional Transition to Organic Partnership Program Assistance Listing No. 10.163, Grant Agreement No. 23-NOPXX-NE-0004. Criteria: SAS 115 requires communication, in writing, to management and those charged with governance, of material weaknesses identified in an audit. Condition and context: A material audit adjustment was proposed that was not identified by the Association’s internal control system. Cause: Management did not identify an adjustment necessary to present the financial statements in accordance with U.S. GAAP. A material audit adjustment was proposed to correct an account balance. Effect or Potential Effect: The control deficiency is a material weakness that results in a material misstatement of the financial statements that was not prevented, or detected and corrected, on a timely basis. Identification of a Repeat Finding: New finding. Recommendation: Management should review the financial statements to ensure all necessary adjustments are made and balances are reflected accurately. Responsible Official’s Response: The Association will continue to rely on its system of oversight provided by the board of directors in reviewing the financial statements of the Association. The Association will also be mindful of identifying a qualified volunteer or potential board member who could review the financial statements.

Segregation of Duties Information on the Federal Program: U.S. Department of the Agriculture, Plains Regional Transition to Organic Partnership Program Assistance Listing No. 10.163, Grant Agreement No. 23-NOPXX-NE-0004. Criteria: SAS 115 requires communication, in writing, to management and those charged with governance, of material weaknesses identified in an audit. Condition and context: The Association does not have appropriate segregation of duties. Cause: The Association does not have enough available accounting staff to fully segregate incompatible duties in a cost-effective manner. Effect or Potential Effect: The significant deficiency adversely affects the Association’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Association’s financial statements that is more than inconsequential will not be prevented or detected by the Association’s internal control. Identification of a Repeat Finding: New finding. Recommendation: The Association’s management and Board of Directors must rely on its review and oversight authority to mitigate this inherent weakness in its internal control system. Responsible Official’s Response: The Association will continue to rely on its system of oversight provided by the board of directors in reviewing the financial statements of the Association. The Association will also be mindful of identifying a qualified volunteer or potential board member who could review the financial statements.

Financial Statement Preparation Information on the Federal Program: U.S. Department of the Agriculture, Plains Regional Transition to Organic Partnership Program Assistance Listing No. 10.163, Grant Agreement No. 23-NOPXX-NE-0004. Criteria: SAS 115 requires communication, in writing, to management and those charged with governance, of material weaknesses identified in an audit. Condition and context: The Association does not have an internal control system designed to provide for the preparation of the financial statements being audited, including the schedule of expenditures of federal awards and note disclosures. Cause: The Association’s accounting personnel do not have the expertise to prepare the financial statements, including note disclosures and the schedule of expenditures of federal awards in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Effect or Potential Effect: The control deficiency is a material weakness that results in a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis. Identification of a Repeat Finding: New finding. Recommendation: The Association should continue to rely on the board for review of the financial statements, including note disclosures and the schedule of expenditures of federal awards. The Association may consider searching for a qualified volunteer to review the Association’s financial statements. Responsible Official’s Response: The Association will continue to rely on its system of oversight provided by the board of directors in reviewing the financial statements of the Association. The Association will also be mindful of identifying a qualified volunteer or potential board member who could review the financial statements.