Muslim Youth for Positive ImpactNon-Profit

Criteria: Internal controls over financial reporting include the ability to timely reconcile general ledger accounts and produce accurate and timely financial statements in accordance with generally accepted accounting principles (GAAP) to ensure that useful information is available to management and those charged with governance. Condition: The internally generated trial balance provided for the audit did not include certain adjusting entries. Material audit adjustments were required to correct the balances in net assets with and without donor restrictions, grants receivable, deferred revenue, and revenues Effect: Without fully analyzing and accurately recording transactions, information provided to management or the board of directors may not be accurate. Recommendation: The Organization should evaluate its revenue recognition policy and update them to be in line with GAAP. Views of responsible officials and planned corrective actions: Management acknowledges that adjustments to deferred revenue, receivables, and revenue were required.

Criteria: The Organization has grant agreements from the government with terms requiring compliance with financial reporting requirements in accordance with Uniform Guidance. As such, for the year ended December 31, 2023, the Organization is required to submit audited financial statements to the Federal Audit Clearinghouse (the “FAC”). The due date for submission of the audit package to FAC is nine (9) months after the Organization’s year-end. Condition: The Organization did not submit its audit within nine (9) months after the Organization’s fiscal year-end. Effect: The effect is that noncompliance with financial reporting deadlines could cause funding sources for the Organization to suspend funding until compliance is achieved. Cause: This condition was due to the Organization not identifying that an audit was required until receiving notification that it had been provided enough funding to require the Organization to submit an audit as part of maintaining compliance with its grant agreements with the government. Recommendation: We recommend that the Organization implement procedures to ensure that all federal funds received are identified as such to ensure that the Organization maintains compliance with applicable federal requirements including required audit submission due dates. We further recommend that these procedures be included in an updated set of financial policies and procedures that are reviewed and approved. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will implement a corrective action plan based on this recommendation.