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G.R.O .W., Inc. <br /> Schedule of Findings and Questioned Costs (continued) <br /> subsequent to June 30 , 2002 . The total of these expenditures was submitted for <br /> reimbursement under the final request of this grant contract. The total amount of these <br /> expenditures was $ 36,235 . This condition is deemed to be a material weakness . <br /> Criteria : Expenditures should be recorded only when the related goods and service <br /> rendered have been properly received, in accordance with generally accepted accounting <br /> principles . Requests for reimbursement should only be prepared based on actual cost <br /> incurred under the applicable grant contract. <br /> Effect: $ 36 ,235 of costs are questioned as a result of failing to meet the period of <br /> availability requirements . <br /> Recommendation: The executive director, treasurer and the Board of Directors need to <br /> provide more review and oversight of reimbursement requests . Simply, Grow must <br /> comply with this criteria. <br /> Management Response: Policy and Procedures have been implemented to ensure that <br /> checks and/or funds are disbursed at the time the good/services are received, and to <br /> further ensure that checks are not being cut based solely upon purchase orders . These <br /> policies also ensure that monthly reimbursement requests will only include the actual <br /> cost incurred. <br /> 02-3 Equipment and Property Management <br /> Reportable Condition: Various expenditures for the purchase of fixed asset were incorrectly <br /> expensed during the period and an adjustment at June 30, 2002 was made to capitalize all fixed <br /> assets noted. This is deemed to be a material weakness . <br /> Criteria: The cost of fixed assets should be capitalized and depreciated over their <br /> estimated useful lives and properly labeled as being purchased with federal dollars . <br /> Effect: Incorrect/inappropriate accounting records and financial statements . <br /> Recommendation: We suggest that Grow implement a written policy requiring all assets <br /> costing more than an established amount, such as $ 100, to be capitalized and depreciated <br /> over the assets ' useful lives . In addition, all fixed assets purchased with federal funds <br /> should be specifically identified as such. <br /> Management Response: Adjustments have been made to capitalize and depreciate all <br /> assets valued at $ 100 or more. A written policy will be developed and implemented <br /> immediately, to ensure that all future asset purchases meeting this criteria, are properly <br /> recorded. GROW currently has no fixed assets purchased using government funds , with <br /> no plans for future purchases . <br /> - 17 - <br />