Audit 371863

2024-001 Financial Reports and Reconciliation Preparation Condition: Western Illinois Regional Council – Community Action Agency's board of directors was not receiving financial information for the first six months of the fiscal year. During this time invoices were not being prepared, and revenue was not being recorded at the end of each month. As Western Illinois Regional Council operates under contracts with project periods established by government sources, untimely billing resulted in Western Illinois Regional Council not receiving reimbursement for the services performed under the contract. Western Illinois Regional Council – Community Action Agency hired Clifton Larson Allen, LLP for outsourced accounting services. However, due to the period of time Western Illinois Regional Council was operating without adequate financial information, a material weakness in internal controls exists. Western Illinois Regional Council – Community Action Agency also experienced delays in issuing the December 31, 2024, audited financial statements which were due September 30, 2025. Western Illinois Regional Council – Community Action Agency was reconciling and making adjustments to the year ended December 31, 2024, general ledger to reconcile revenues and receivables. Criteria: An accounting system should provide timely and accurate information for management. The reconciliation of account balances is integral internal control activity to determine that stated account balances are accurate and fairly reported. Organizational management and accounting personnel should reconcile general ledger accounts to subsidiary ledgers and other supporting documents in a timely and effective manner. Uniform Guidance 200.302(b)(4) states each non-federal entity must provide for "effective control over, and accountability for, all funds, property, and other assets." Futhermore, Uniform Guidance 200.512.(a) requires audits be submitted nine months after the end of the audit period. Cause: Western Illinois Regional Council – Community Action Agency experienced changes in key employees. This appears to have created issues with adequate training regarding reconciliations and financial reporting. Effect: Without performing adequate reporting, information provided to management is innacurate and increases the number of days Western Illinois Regional Council – Community Action Agency is operating without grant reimbursement. Also, the probability that fraud or material errors will occur and go undetected generally increases. Recommendation: Western Illinois Regional Council – Community Action Agency should evaluate the process used to prepare reconciliations on a regular basis to ensure information is captured in a timely manner for internal and external reporting purposes. View of Responsible Officials: Management agrees with this finding.