Iredell County Partnership for Young Children, Inc.

Internal Control Deficiencies - Restatement Statement of Condition A material adjustment related to the release of donor restrictions in a prior reporting period was required in order for the financial statement to be fairly presented in accordance with the modified cash basis of accounting. Criteria Internal controls over financial reporting should exist to ensure that material misstatements are detected and corrected by management in a timely manner. Cause Management did not properly implement controls over financial reporting. Effect or Potential Effect Management may produce financial statements that are materially misstated. Net assets with donor restrictions and net assets without donor restrictions were misstated by $130,885 as previously reported in the June 30, 2020 audited financial statements. Recommendation Management should undertake a review of internal controls over financial reporting and ensure that relevant information is properly recorded in the financial records to prevent misstatements from occurring in the future. Reporting Views of Responsible Officials We agree with the finding. A material adjustment related to a prior reporting period was required in order for the financial statements to be fairly presented. It is important to note, however that we relied on data provided by the grantor and guidance from our accounting firm when classifying these funds. It is also important to note that this finding is a single occurrence in our 20+ years of administering NC Pre-K funds and in no way affects our compliance or conformity with fulfilling contract requirements.

1. Current Findings on the Schedule of Findings and Questioned Costs 2. Finding 2021-001 a. Comments on the Finding and Each Recommendation We agree with our auditor's finding. A material adjustment related to prior reporting period was required in order for the financial statements to be fairly presented. It is important to note, however that we relied on data provided by the grantor and guidance from our accounting firm when classifying these funds. This finding is a single occurrence in our 20+ years of administering NC Pre-K funds and in no way affects our compliance or conformity with fulfilling contract requirements. b. Action(s) Taken or Planned on the Finding We have implemented steps and strengthened internal controls to ensure that funding that is split across different funds is reviewed for proper allocation and classification between FASB and Fund codes prior to finalizing the trial balance. We will continue to work with the grantor and our accounting firm to ensure that funds are both accurately reported and recorded, thereby mitigating the possibility of misstatements.