The expenditures of Holyoke Community College Foundation were used for the exclusive benefit of the college. However, during our audit fieldwork, we noted areas for improvement in the existing internal control environment that we would like to bring to management’s attention. These areas include the following:
- As of June 30, 2019, the foundation managed $19.3 million of assets that supported the growth and improvement of Holyoke Community College. During our review, we noted that the foundation did not have documented accounting policies and procedures to guide management in performing daily accounting activities.
Since the executive director and the board of directors share the responsibility of financial accounting for the foundation, they should work together to document accounting policies and procedures in a manual that can be used to support succession training and increase the transparency of this critical function.
- The foundation has procedures that require all board members, upon appointment and annually thereafter, to make full, written disclosures of potential conflicts of interest that may interfere with their ability to serve. The foundation is also required to disclose all related-party transactions1 in its financial statements.
During our review of the foundation’s audited financial statements, we noted that certain businesses associated with the foundation’s board members provided goods and services to the foundation. These relationships were disclosed in the foundation’s financial statements. However, three of the payments made to those businesses, totaling $21,618, were not disclosed as related-party transactions in the financial statements. Not properly identifying and disclosing related-party transactions could adversely affect the integrity of the foundation’s decision-making process.
The foundation should closely monitor all financial transactions to ensure that all related-party transactions are identified and properly disclosed.
|Date published:||September 18, 2020|