Finding Text
2022-001 - Timely and Frequent Reconciliation of Account BalancesCriteria: Effectively designed and executed policies and procedures of financial processes should exist to ensureproper recordkeeping and reporting.Condition: Certain balances were not timely or adequately reconciled throughout the year, including accountsreceivable, deferred revenue, accrued salaries payable/salary expense, fixed assets/depreciation, and consumerdeposit asset and liability balances.Cause: Reconciliation of certain account balances did not take place consistently throughout the year. Further,certain programs posted accounts receivable and deferred revenue transactions to the same balance sheetaccount potentially misstating assets and liabilities, as well as potentially misleading users of the financialstatements.Effect: The lack of reconciliations led to material audit adjustments necessary to correct significant errorsidentified in the following areas: accounts receivable, accrued liabilities/accrued salaries, depreciation/fixedassets, unemployment liabilities, deferred revenue and contract and grant revenues recognition /expenditures.Recommendation: We recommend the management review current policies and procedures to ensure thattimely reconciliations are prepared and reviewed throughout the year as part of the monthly financial reportingprocess before financial records are presented to executive management and the board for decision-makingpurposes.Views of Responsible Official and Planned Corrective Actions: The Executive Director and Senior Director ofFinance will continue to update procedures to provide additional clarity of objectives, and to ensure areconciliations are checked by a second individual as part of the process.