Finding 1055155 (2023-001)

Finding 2023-01 Improper Reconciliation of Cash Criteria In order to maintain proper internal controls over cash, it is imperative that cash accounts be properly reconciled. Condition UMARC cash balance as of June 30, 2023 was not properly reconciled. Cause This condition was due to UMARC’s accounting data file becoming corrupted during the fiscal close process. UMARC did not have a backup of its accounting data file as of June 30, 2023 to use to recover its accounting data. As such, certain transactions had to be re-input into an older back up data file in order to recreate the financial accounting records. During the process, there were several checks input with incorrect dates for the previous fiscal year (FY2022) resulting in a material misstatement of the cash balance. Effect The effect is that cash and beginning net assets were overstated by $316,455. Additionally, controls over the financial reporting process were weakened thereby increasing the risk that material misstatements could be included in the financial statements without management being aware.