THE STRATTON AREA FOUNDATION INC

Financial Statement Findings 2019-001: Audit Adjustments Federal Program: None Criteria: The internal control structure should be designed to identify adjusting journal entries which are significant to the Organization?s financial statement prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Condition: As part of our audit, a material adjusting journal entry related to the valuation of capital assets was proposed and recorded, significant in the aggregate, to properly state the financial statements in accordance with GAAP. Cause: The internal control structure is not properly designed and implemented to identify all significant adjustments to the Organization?s financial statements. Effect: The cost basis of the capital assets was overstated on the financial statements. This may have overstated the matching requirements of CFDA # 10.405 relating to the construction of the housing complex in previous years. Questioned Costs: $301,280 Prevalence and Consequences: The results were isolated to the cost basis of capital assets and the related depreciation of those assets. Repeat Finding: No Management Response: A properly designed internal control structure will be established to ensure that complete and accurate information is available to properly record transactions in accordance with GAAP.