YWCA OF MISSOULANon-Profit

2022-001 REVENUE RECOGNITION Condition and Criteria: During the audit, we discovered a deficiency in the Organization's internal controls related to an unconditional, multi-year grant in which the amounts to be received in future periods were not accrued and recognized in the year the grant was awarded. In accordance with ASC 958-605-25, contributions or grants received with conditions based on time should be recorded as unconditional, with a corresponding donor restriction in net assets due to the passage of time. Cause: The Organization did not have adequate internal controls in place to identify and recognize the unconditional, multi-year grant in question. Effect: The effect of this deficiency in internal controls on the year ended June 30, 2022 was the understatement of grants receivable by $46,000, overstatement of revenue by $133,500. The effect of this deficiency in internal controls on the year ended June 30, 2021 was the understatement of revenue and grants receivable of $179,500. This deficiency has the potential effect of understating financial resources from unconditional grant payments occurring in the future. Recommendation: We recommend the Organization implement procedures to closely review grant agreements to ensure unconditional, multi-year grants are recorded in accordance with U.S GAAP.

2020-001 YEAR END CLOSE Condition and Criteria: During the course of the audit, there were several adjustments that were immaterial individually, but in the aggregate amounted to a material misstatement of the consolidated financial statements. The largest changes were to prior year property and equipment and net assets, and current year receivables, property and equipment, interest payable, long term liabilities, net assets, interest income, and personnel expenses. Cause: The Organization does not have adequate internal controls over the year end closing process and appropriate communication between the two entities being consolidated. Effect: As a cumulative result of the largest adjustments noted above, total assets and total net assets in the prior year were understated by a net $102,987, while in the current year, total assets, total liabilities, total net assets, total revenue, and total expenses were understated by a net $161,768, $120,396, $41,372, $73,264, and $64,521, respectively. The potential effect of this material weakness is the material misstatement of financial results for stakeholders. Recommendation: We recommend the Organization implement controls over the closing process at year end to ensure that all accounts reconcile, appropriate adjustments are made, and intercompany transactions are recorded in similar manners between each entity.