Management’s Response Community Council of Idaho, Inc. acknowledges the finding related to untimely reconciliations, material audit adjustments, and delayed financial statement issuance. Management agrees that improvements are necessary to strengthen internal controls over financial reporting, ensur...
Management’s Response Community Council of Idaho, Inc. acknowledges the finding related to untimely reconciliations, material audit adjustments, and delayed financial statement issuance. Management agrees that improvements are necessary to strengthen internal controls over financial reporting, ensure timely account reconciliations, and improve the overall financial close and audit preparation process. Management recognizes that turnover within the business office during the audit year significantly impacted continuity, institutional knowledge, and the timely completion of reconciliations and closing procedures. Subsequent to year end, management has initiated corrective actions designed to improve financial reporting accuracy, accountability, and timeliness. Corrective Actions to Be Implemented 1. Implementation of Formal Monthly Closing Procedures Management will implement a standardized monthly financial close process with defined timelines, responsibilities, and review procedures. The monthly close process will include: Completion of all balance sheet reconciliations, Review of grant and contract revenue accounts, Review of property and equipment activity, Reconciliation of debt schedules, Reconciliation of pharmaceutical inventory balances, Recording of depreciation and interest expense, and Verification that all material journal entries are posted timely. A monthly close checklist will be developed and maintained to ensure consistency and accountability. 2. Timely Reconciliation of Grant and Contract Accounts Management will strengthen procedures surrounding grant and contract accounting to ensure receivables and revenue are reconciled monthly and supported by appropriate documentation. Actions include: Reconciling grant receivable balances to supporting reimbursement requests and funding agency records, Reviewing deferred revenue and earned revenue calculations monthly, Investigating and resolving variances timely, and Implementing supervisory review of grant reconciliations. 3. Enhanced Review and Oversight Controls Management will implement additional review controls over financial reporting and account reconciliations. These controls will include: Documented supervisory review and approval of reconciliations, Review of significant or unusual journal entries, Periodic review of financial statements and supporting schedules by senior finance leadership, and Earlier audit preparation and interim review procedures to identify issues prior to year end. 4. Strengthening Staffing and Organizational Structure Management and executive leadership have evaluated the operational needs of the business office and have taken steps to improve staffing stability and oversight capacity. Actions include: Clarifying accounting roles and responsibilities, Enhancing cross-training within the finance department, Providing additional training related to grant accounting and reconciliations, Utilizing external resources or consultants, as needed, to support complex accounting areas and transition periods. 5. Improvement of Clinic Reporting Processes Management will continue evaluating clinic reporting systems and procedures to ensure operational growth is adequately supported by accounting and financial reporting processes. This includes: Improving coordination between clinic operations and accounting, Standardizing reporting procedures, Evaluating system-generated reports for accuracy and completeness, and Implementing additional reconciliation and review controls related to clinic financial activity. 6. Audit Readiness and Timeliness Improvements Management will establish an audit preparation timeline with interim deadlines to support timely completion of the annual audit and compliance with federal reporting deadlines. The organization will: Prepare schedules and reconciliations in advance of audit fieldwork, Conduct periodic internal reviews of audit support documentation, Improve coordination with external auditors throughout the year, and Monitor progress toward required reporting deadlines. Contact Person Responsible for Corrective Action: Implementation oversight will be shared among executive leadership, finance management, program leadership, and those charged with governance. Anticipated Completion Date: Corrective actions began subsequent to year end and are expected to be substantially implemented during fiscal year 2026, with ongoing monitoring and refinement thereafter.