HELENA INDIAN ALLIANCENon-Profit

Finding 2023-001: Year-End Close and Review - Condition and Criteria: Under GAAP, expenses and related liabilities should be recorded in the period in which they are incurred, regardless of when the invoice is received or paid. During our audit procedures over year-end accounts payable, we identified $416,492 in invoices related to the fiscal year ended September 30, 2023 that were not recorded until the subsequent fiscal year. This resulted in a material understatement of liabilities and fixed assets as of year-end.

Finding 2023-002: Federal Expenditures Reported Under Incorrect Assistance Listing Number (ALN) - Condition and Criteria: The SEFA must accurately identify all federal awards expended during the year, including the correct Assistance Listing Number (ALN) for each program. Our review of the SEFA for the year ended September 30, 2023, identified misclassifications in ALNs and reported expenditures that exceeded actual revenue received for several programs.

Finding 2023-003: Overstatement of Gross Revenue and Contractual Allowances in the General Ledger - Condition and Criteria: GAAP require that revenue and related deductions such as contractual allowances be recorded accurately and supported by underlying records. During our testing of patient service revenue, we noted that both gross revenue and contractual allowances were overstated in the general ledger. Although the net patient service revenue was ultimately stated correctly, the individual components were not accurately supported by the billing or patient accounting system.

Finding 2023-004: Late Submission of the Single Audit Reporting Package to the Federal Audit Clearinghouse - Condition and Criteria: The audit for the current year ended September 30, 2023 was not submitted to the Federal Audit Clearinghouse within the statutory deadline of the earlier of nine months after the end of the fiscal year or thirty days after the date of the auditors' report. Internal controls should be in place to provide reasonable assurance that accounting records and information pertaining to the audit process are finalized and made available to allow adequate time to complete the audit prior to the statutory deadline.

Finding 2023-005: Restricted Net Assets Restatement - Condition and Criteria: The Organization must maintain accurate records and internal controls to ensure that financial statements are free of material misstatement, including the proper classification of net assets. During the audit, material adjustments were required to correct restricted net assets for prior years. The adjustments were necessary due to contributions and/or grant funds that had been incorrectly classified as unrestricted rather than donor-restricted. This misstatement resulted in a material errors in previously issued financial statements.

Finding 2021-001: Year-End Close and Review Condition and Criteria: During the prior year audit, we discovered deficiencies in the internal controls over the year-end close and review process that accumulated to a material weakness. Year-end balances for accrued wages, compensated absences, accrued property taxes, and unallocated deposits required adjustments due to a number of reasons including year-end entries were entered incorrectly, balances were incorrectly calculated, or simply no year-end entry was made. In addition, cash balances contained numerous outstanding reconciling items that were required to be removed as they related to duplicative checks and deposits. Lastly, there were capital expenditures not appropriately capitalized per the Organization's policy. Recommendation: We recommend the Organization perform a thorough year-end close and review by reviewing current balances compared to the prior year, reviewing bank reconciliations for any largely outstanding items, and reviewing details of account balances, as necessary, prior to providing the trial balance for audit. errors related to the year-end close. First, beginning net assets were overstated by $61,479 related to un-posted adjustments from the prior year audit. Second, accounts payable and fixed assets were understated by $101,650 related to a construction bill that was not accrued at year-end. Third, accrued compensated absences was overstated by $62,919 related to errors in the Organization's calculation. We continue to recommend the Organization perform a thorough year-end close and review by reviewing current balances compared to the prior year, reviewing bank reconciliations for any largely outstanding items, and reviewing details of account balances, as necessary, prior to providing the trial balance for audit.

Finding 2021-001: Year-End Close and Review Condition and Criteria: During the current year audit, we discovered deficiencies in the internal controls over the year-end close and review process that accumulated to a material weakness. Year-end balances for accrued wages, compensated absences, accrued property taxes, and unallocated deposits required adjustments due to a number of reasons including year-end entries were entered incorrectly, balances were incorrectly calculated, or simply no year-end entry was made. In addition, cash balances contained numerous outstanding reconciling items that were required to be removed as they related to duplicative checks and deposits. Lastly, there were capital expenditures not appropriately capitalized per the Organization's policy. Cause: The Organization did not perform a thorough year-end close and review of balances and corresponding account details, as necessary, prior to providing the trial balance for the audit. Effect: The effect of these deficiencies in internal controls was the net understatement of assets in the amount of $73,723, net understatement of liabilities in the amount of $51,271, and the net understatement of net assets in the amount of $22,452. The potential effect of these deficiencies is the misstatement of month-end and year-end asset, liability, and net asset balances due to an erroneous closing process. Recommendation: We recommend the Organization perform a thorough year-end close and review by reviewing current balances compared to the prior year, reviewing bank reconciliations for any largely outstanding items, and reviewing details of account balances, as necessary, prior to providing the trial balance for audit.

Finding 2021-002: Indirect Cost Allocation Condition and Criteria: During the current year audit, we noted the allocation methodology established for shared costs and payroll costs were inconsistently followed. Indirect costs should be allocated to each federal program based on the benefit provided to that program. Cause: The Organization is not consistently applying the established methodology for shared costs and payroll costs. Effect: There is no dollar impact on the current year audit. However, the potential effect of this deficiency is increased risk that disallowed costs could be allocated to federal grants in the future. Recommendation: We recommend the Organization establish, document, and maintain an allocation methodology for indirect costs including payroll costs. Indirect costs should be allocated to each federal program based on the benefit provided.