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USAT Steps Up Internal Controls Reorganizes Senior Management After Audit Uncovers Accounting Issues

MALVERN, PA -- USA Technologies Inc. laid out several actions that it plans to take to strengthen its management team and enhance internal controls and governance following an audit committee investigation that revealed accounting issues. The payment technology company's audit committee found that certain transactions conducted in fiscal 2017 and fiscal 2018 had prematurely recognized revenue and that certain items had been recorded as expenses but should be treated as contra-revenue items in earl...

January 13, 2019

MALVERN, PA -- USA Technologies Inc. laid out several actions that it plans to take to strengthen its management team and enhance internal controls and governance following an audit committee investigation that revealed accounting issues.
 
The payment technology company's audit committee found that certain transactions conducted in fiscal 2017 and fiscal 2018 had prematurely recognized revenue and that certain items had been recorded as expenses but should be treated as contra-revenue items in earlier fiscal quarters.
 
"As set forth in the Form 8-K, neither the Company nor its independent auditor has completed its analysis of the specific adjustments to previously reported revenues identified by the investigation, and such analysis could result in further adjustments that could be materially different from those set forth above," the company said in a statement.
 
USAT said it will reorganize its senior management team by adding a chief operating officer. It will also split the roles of chairman and chief executive with Stephen P. Herbert continuing to serve as chief executive and as a member of the board and Albin Moschner appointed non-executive chairman. The company will also create a compliance committee.
 
"We have grown significantly over the past several years and believe the measures we are implementing will bring USA Technologies' oversight and control functions and corporate governance more in line with a company of our size and with best practices," said Herbert. "We also believe these measures will enhance the company's coordination, enable tighter day-to-day running of operations, helping us to be a stronger company and create value for shareholders.
 
Click here to read USAT's letter to shareholders.