Audit 31817

Condition: The Organization did not identify the recording of duplicate invoices prior to vendor payments and did not identify the duplicate expenses paid during financial statement reviews. Criteria: The Organization has a responsibility to properly approve all invoices before vendor payments and to review the financial statements on a regular basis to ensure accuracy of the financial data. Cause: The duplicate payments were a result of several failures in the control process including (1) accounts payable personnel entering the same invoice under two similar but different vendors (2) entering incorrect invoice numbers and (3) insufficient review of invoices and financial results at the end of each fiscal period. Effect: $13,259 of duplicate payments were made to vendors. Recommendation: Management continues to redesign the control around this process to identify and correct such items on a timely basis and has hired new personnel to administer the control. We recommend the management company communicate written policies with clearly defined roles to its employees regarding approval of vendor payments and financial statement reviews. Views of Responsible Officials and Planned Corrective Actions: The management company agrees with the auditors' findings. The management company had significant employee turnover in both the accounts payable department and regional manager positions during several fiscal years. Additional training and review procedures will be discussed and communicated to the responsible parties. The management company will contact vendors to obtain refunds for duplicate invoice payments. It will also review its current procedures and clearly define rules with its employees to prevent errors from detection in the future.

Condition: The Organization did not identify the recording of duplicate invoices prior to vendor payments and did not identify the duplicate expenses paid during financial statement reviews. Criteria: The Organization has a responsibility to properly approve all invoices before vendor payments and to review the financial statements on a regular basis to ensure accuracy of the financial data. Cause: The duplicate payments were a result of several failures in the control process including (1) accounts payable personnel entering the same invoice under two similar but different vendors (2) entering incorrect invoice numbers and (3) insufficient review of invoices and financial results at the end of each fiscal period. Effect: $13,259 of duplicate payments were made to vendors. Recommendation: Management continues to redesign the control around this process to identify and correct such items on a timely basis and has hired new personnel to administer the control. We recommend the management company communicate written policies with clearly defined roles to its employees regarding approval of vendor payments and financial statement reviews. Views of Responsible Officials and Planned Corrective Actions: The management company agrees with the auditors' findings. The management company had significant employee turnover in both the accounts payable department and regional manager positions during several fiscal years. Additional training and review procedures will be discussed and communicated to the responsible parties. The management company will contact vendors to obtain refunds for duplicate invoice payments. It will also review its current procedures and clearly define rules with its employees to prevent errors from detection in the future.