Audit 371980

Criteria: Bank reconciliations are a key part of an organization’s internal control system for cash management. Condition: The Commission is not timely reconciling the bank accounts. Cause: The Commission had staff turnover in the finance position and did not have sufficient controls and redundancies to allow all accounting functions to be performed on a timely basis. Effect: The Commission’s cash management was not operating effectively which made it more difficult to identify and correct errors and resulted in numerous audit adjustments to correct posting errors. Recommendation: The Commission should implement controls to ensure that all bank accounts are reconciled each month as soon as the bank statement is received. Views of responsible officials and planned corrective actions: The CFO will develop a policy for how bank reconciliations will occur monthly and to be jointly signed by the CFO and the Executive Director. The policy will contemplate a vacancy in the positions and propose a backup process for bank reconciliations.

Criteria: The Commission is required to provide a schedule of expenditures of federal awards (SEFA) to the auditor. Condition: The Commission did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. Cause: The Commission had staff turnover in the finance position and did not have sufficient controls and redundancies to allow all accounting functions to be performed on a timely basis. Effect: The errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Commission’s general ledger. Recommendation: The Commission should implement controls to ensure that all revenue is properly recorded in the general ledger and all federal awards are properly identified. Views of responsible officials and planned corrective actions: The CFO will develop a policy for how revenue is to be accrued into the general ledger with a designation of funding source. The policy shall be memorialized as an MPPDC financial operations document and jointly signed by the CFO and the Executive Director. The policy shall state why the preferred method was selected to ensure continuity of operations in the event of future staff turnover.

Criteria: The Commission must submit the reporting package within the earlier of 30 days after the receipt of the audit report, or the nine months after the end of the audit period. Condition: The Commission did not submit the single audit reporting package to the Federal Audit Clearinghouse within nine months after the end of the audit period as required. Cause: The Commission had staff turnover in the finance position and did not have sufficient controls and redundancies to allow them to close the year to get ready for the audit. Effect: The Commission did not adhere to the reporting requirements of the Uniform Guidance. Recommendation: The Commission should adhere to Uniform Guidance reporting requirements. Views of responsible officials and planned corrective actions: The CFO and the Executive Director will develop a policy to include a timeline for arranging for the audit, closing out the year and submitting the reporting package in accordance with the Uniform Guidance reporting. The procedures will involve cross-training several employees to prevent any disruption from employee turnover.