2024-002
Material Weakness in Internal Control over Compliance
21.023- Emergency Rental Assistance
93.914 – HIV Prevention
93.959 – Block Grants for Prevention and Treatment of Substance Abuse
City of Philadelphia, Office of Addition Services (Contract # 22-20537-01)
City of Philadelphia, Divi...
2024-002
Material Weakness in Internal Control over Compliance
21.023- Emergency Rental Assistance
93.914 – HIV Prevention
93.959 – Block Grants for Prevention and Treatment of Substance Abuse
City of Philadelphia, Office of Addition Services (Contract # 22-20537-01)
City of Philadelphia, Division of HIV Health (Contract #21-20003-03 and 22-20537-02)
Philadelphia Housing Development Corporation (Contract # 21-20469)
Condition:
As part of the audit management was to provide us with a complete final trial balance where balances agree to the supporting schedules, reconciliations and documentation provided by management. We noted that the trial balance and general ledger detail reports originally provided by management were (a) delayed, (b) included unreconciled material account balances, (c) multiple journal entries (material and not material), (c) transactions missing from the trial balance, and (d) some reconciliations that either did not agree with the trial balance or individual transactions could not be traced back from the documentation provided to the general ledger. This had caused delays in the completion of the audit, preparation of financial statements, and associated disclosures and the timely arrival of our audit and single audit conclusion.
Recommendation:
We recommend that management implement policies and procedures as it relates to the reconciliation of accounts, tracking of transactions, and regular review to ensure that calculations of general ledge account balances are accurate and complete. In addition, we continue to recommend that management revisit its financial closing and reporting policies to include updates to its procedures for year-end closes and the timing of when final journal entries and analysis are performed.
Repeat Finding:
Yes
Explanation of Disagreement with Audit Finding
There is no disagreement with the audit finding.
Action taken in response to finding:
Management recognizes the recent delays in timely and accurate financial information and is committed to improving. We will implement updated procedures to ensure the swift and precise presentation of a complete final trial balance that aligns perfectly with the supporting schedules, reconciliations, and documentation. Our enhanced processes will involve promptly recording revenues and expenses, regularly reconciling bank records with accounts, and minimizing journal entries outside the appropriate period.
The accounting staff has faced challenges meeting deadlines due to unexpected health issues and recent turnover within the team. Despite these obstacles, we are focused on optimizing our resources and enhancing our efficiency to ensure that tasks are completed on time.
Planned completion date for corrective action plan:
June 30, 2025