UTAH ADVANCED MATERIALS MANUFACTURING INITIATIVENon-Profit

2021-001 ? Material Weakness Condition: While performing tests over the Initiative?s net assets, we discovered that net assets did not appropriately roll forward from the prior year and that journal entries had been posted to retained earnings. Repeat Finding: No Effect: If not corrected, the financial statements would have shown an understatement of revenue for $15,000, an understatement of expenses of $6,000, and an overstatement of net assets of $9,000. This would be considered a material misstatement in the financial statement presentation. Recommendation: We recommend a thorough review be performed over the final year end balances to ensure the amounts agree to the audited financial statements and final trial balance to ensure beginning balances in the subsequent year are appropriate. Management?s Response: Management will review the processes in place and determine the necessary course of action so that net assets appropriately roll from year to year. A corrective action plan has been included with the audit report.

2021-002 ? Significant Deficiency Condition: While performing tests over the completeness of the Initiative?s accounts payable and accrued liabilities, we discovered an invoice paid subsequent to year end that related to fiscal year 2021 and should have been reported as an expense and a payable for the year ended December 31, 2021. Repeat Finding: No Effect: If not corrected, the financial statements would have shown an understatement of expenses for $6,250 and an understatement of accounts payable of $6,250. This amount is not material to the financial statements as a whole, but is significant. Recommendation: We recommend appropriate cut-off procedures be performed related to accounts payable. Amounts paid subsequent to year end that relate to the prior period should be expensed in the prior period and recognized as an accounts payable. Management?s Response: Management will review the processes in place and determine the necessary course of action so that accounts payable cutoff procedures are appropriate. A corrective action plan has been included with the audit report.

2021-003 ? Material Weakness Federal Program: Affected all Federal Programs Condition: In determining whether or not a Single Audit was required, there were material discrepancies between the Initiative?s management and accounting personnel in the amounts that should be reported in the Schedule of Expenditures of Federal Awards. Without an accurate and timely Schedule of Expenditures of Federal Awards, management was unable to appropriately evaluate the need for the Initiative to obtain a Single Audit. This resulted in significant delays in the reporting timeline for the Initiative?s Single Audit and financial statement reports. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend better communication and connection between the Initiative?s management and accounting personnel. When grants are obtained, it should be clearly communicated to the accounting personnel whether the grant includes federal funding as part of the revenue recognition process. The accounting for grants was appropriately segregated by grant and reporting on such grants was clear. However, the accounting team was unaware which grants were federal. Due to the federal reporting requirements, it is important for the accounting personnel and management to be on the same page on what revenues and expenditures are from federal sources. Management?s Response: Management will review the processes in place and determine the necessary course of action so that federal funding is appropriately tracked and known in order to prepare an accurate and timely Schedule of Expenditures of Federal Awards. A corrective action plan has been included with the audit report.