BIOINDUSTRIAL MANUFACTURING AND DESIGN ECOSYSTEMNon-Profit

2024-001 - General Ledger Maintenance Condition: Several material client prepared journal entries were provided during the audit process and a material audit adjustment was required to present the financial statements and schedule of expenditures of federal awards in accordance with accounting principles generally accepted in the United States of America and the Uniform Guidance, respectively. Criteria: An effective system of internal controls allows management or employees, in the normal course of performing their assigned functions, to prevent, detect and correct misstatements on a timely basis. Effect: Significant adjustments that were material in the aggregate in relation to the financial statements were not detected and recorded on a timely basis. Cause: Timely reconciliation of certain general ledger accounts was not performed by management. As a result, material adjustments were required to be made to the Organization's financial statement accounts. Recommendation: We recommend the Organization review its policies and procedures to ensure that all account balances and transactions are periodically reviewed for proper treatment in accordance with accounting principles generally accepted in the United States of America. View of Responsible Officials and Planned Corrective Actions: The Organization is continuing to hire full time accounting and finance personnel with experience in not-for-profit accounting and government reporting compliance. The Organization has Implemented key internal controls to ensure the completeness and accuracy of financial information. This includes establishing robust general ledger reviews and timely preparation of accounting reconciliations. Additionally, the Organization is establishing quarterly review practices to ensure timely review of general ledger activity, timely requests for grant reimbursement, and accuracy of grant revenue and expense information.

Condition: Several material audit adjustments were required to present the financial statements and schedule of expenditures of federal awards in accordance with accounting principles generally accepted in the United States of America. Criteria: An effective system of intenal controls allows management or employees, in the normal course of performing their assigned functions, to prevent, detect and correct misstatements on a timely basis. Effect: Significant adjustments that were material in the aggregate in relation to the financial statements were not detected and recorded on a timely basis. Cause: Timely reconciliation of certain general ledger accounts was not performed by management. As a result, material adjustments were required to be made to the Organization's financial statement accounts. Recommendation: We recommend the Organization review its policies and procedures to ensure that all account balances and transactions are periodically reviewed for proper treatment in accordance with accounting principles generally accepted in the United States of America. View of Responsible Officials and Planned Corrective Actions: See management's attached corrective action plan.

2022-001 Reporting Identification of the Federal Programs: U.S. Department of Defense, ALN 12.800, Grant Number FA8650-21-2-5028 Criteria: Formally documented internal control procedures ensure submission of the required quarterly SF-425 federal financial reports as required by Regulation Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Condition: The Organization's quarterly SF-425 reports for the year ended September 30, 2022 were not submitted on behalf of the Organization. Questioned Costs: None noted. Context: We reviewed one SF-425 federal financial report were selected for testing. It was noted that the selected report was submitted under a different organization's name. Additionally, SF-425 reports for the remaining three quarters were not submitted. Effect: The lack of a formal process to ensure the timely submission of the SF-425 federal financial reports could delay the Organization's ability to draw federal funds. Cause: The organization assisting with the SF-425 submitted the report under its own name, rather than that of the Organization for the first quarter of fiscal year 2022. The remaining reports for the next three quarters were not submitted. Recommendation: The Organization should develop formally documented internal control procedures to create a process to ensure that the SF-425 federal financial reports are submitted accurately. View of Responsible Officials and Planned Corrective Actions: See accompanying Corrective Action Plan as prepared by management.