Finding Text
Criteria: A strong control environment, establishes and maintains authorization limits by personnel levels over the approval and recording of journal entries. This control should include review and approval of changes to original journal entries when material. Conditions Found: During our audit, we noted the District did not have authorization limits by personnel over journal entries. Approval was noted for all journal entries tested, however, there was an instance where a material journal entry was changed and not approved. Cause: The District lacks authorization limits on journal entry review and approval. Effect: The lack of approval and establishment of authorization limits around general journal entries could result in errors and misrepresentations in the financial statements. The condition found appears to be systemic in nature and is considered to be a significant deficiency in internal controls around journal entry approval. Recommendation: We recommend that polices regarding journal entry review and approval be reviewed to determine that individuals at the appropriate level are assigned this important responsibility. Views of Responsible Officials: Management agrees with this recommendation and has implemented a policy in 2024.