MEALS ON WHEELS ATLANTA INC

Criteria: Generally accepted accounting principles prohibit recording revenue for grant funds that have not yet been earned. Condition: The Organization recorded within grant revenue and accounts receivable, grant funds that had notyet been earned in accordance with the grant terms.Effect: The adjustment to accounts receivable had the effect of decreasing grants receivable by $195,245 and decreasing grant revenue by $195,245. Cause: The improper recording of accounts receivable was identified during audit procedures conducted over revenue recognition for the major programs.Recommendation: The Organization should review all grant agreements related to grant payments receivedand based upon the terms of the agreement determine if recording a receivable is appropriate.Views of Responsible Officials: We agree with finding and will follow prescribed recommendation.

Criteria: Regulations require that the Organization must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient, to comply with 2 CFR § 200.305(b). Condition: The 93.493 grant is a reimbursement type grant, subject to an approved preliminary expense budget, as the grant agreement does not specifically indicate that it is an advance-type grant. As such, all supported expenses should be recognized before applying for funding or expended within a “reasonable” period subsequent to receipt of funds. Effect: A portion of reimbursement funds were received prior to supporting expenditures being recognized, and funds were not subsequently expended within a “reasonable” period. Questioned Costs: No questioned costs were identified as a result of our procedures. Cause: The Organization applied for grant drawdowns based on projections and expended funds greater than 30 days beyond receipt, resulting in expenditures occurring prior to being identified as qualified expenditures. Recommendation: The Organization should review internal policies related to drawdowns to ensure that drawdowns occur in compliance with Uniform Guidance. Views of Responsible Officials: We agree with finding and will follow prescribed recommendation

Condition: Generally accepted accounting principles require that deferred revenue be recorded for all amounts of grant funds received that have not yet been earned. Context: The improper recording of deferred revenues were identified during our audit work surrounding the revenue recognition of the major program. Effect: The adjustment to deferred revenues had the effect of increasing deferred revenues by $236,250 and decreasing grant revenue by $236,250. Recommendation: The Organization should review all grant agreements related to grant payments received and based upon the terms of the agreement determine if deferral is appropriate. Managements Response: We agree with finding, and will follow prescribed recommendation.

Condition: The grant is a reimbursement type grant, as the grant agreement does not specifically indicate that it is an advance type grant. As such, all expenses should be recognized before applying for funding, or expended within a “reasonable” period subsequent to receipt of funds. Context: The Organization applied for grant drawdowns based on projections and expended funds greater than 30 days beyond receipt, resulting in the expenditure occurring in a different fiscal year than when the funds were received. Effect: The receipt of funds before expenditure was $708,288. Recommendation: The Organization should review internal policies related to drawdowns to ensure that drawdowns occur in compliance with Uniform Guidance. Managements Response: We agree with finding, and will follow prescribed recommendation.