Community Services Unlimited, Inc.

Criteria: An annual roll forward schedule detailing donor‐restricted contribution, including the related releases from restriction must be regularly maintained by an organization receiving such contributions. Condition: Historically, the auditors assisted the client with the preparation of the restricted net asset roll forward schedule, under the strict guidelines of the AICPA’s independence standards. During the fieldwork phase of the audit, CSU’s management identified a difference related to the classification of beginning net asset balances and worked with the auditors to resolve the matter. As a result, a revised schedule of net assets with donor restrictions was prepared, which contained a difference in its beginning balance as compared to the previous year’s ending balance. Context: The beginning balance of net assets with donor restrictions was misstated. Cause: CSU’s internal controls over the review and approval of the schedule of net assets with donor restrictions were not sufficiently documented and consistently applied. Effect or Potential Effect: The beginning balance for net assets without donor restrictions was overstated by $806,133 while the beginning balance for net assets with donor restrictions was understated by the same amount. Recommendation: We recommend CSU maintain a detailed restricted net asset roll forward and provide the schedule to the auditors upon commencement of the audit. The roll forward shall be reviewed and approved by authorized individuals before being presented to the auditors. Views of the Responsible Officials and Planned Corrective Actions: CSU agrees with the finding and will implement recommended procedures immediately.