Finding 1075677 (2023-003)

Item # 2023-003 Reconciliation of Bank Accounts (Significant Deficiency in Internal Control) Criteria: Under GAAP, bank accounts are required to be reconciled on a regular basis to ensure that they are properly stated under the accrual basis of accounting. Condition: During the year under audit, the Organization did not reconcile the ending balances of all accounts held with financial institutions during the fiscal year. Cause: The Organization did not compare the balances per statements received for bank accounts from financial institutions with its own internal account balances and failed to make the necessary accrual based accounting adjustments for reconciling items. Effect: Failure to update internal controls to comply with the requirements of the GAAP could result in ineffective monitoring of costs allocated to the federal program. Recommendation: The Organization should strengthen its internal control practices by updating its policies and procedures to comply with GAAP. Views of Responsible Officials and Planned Corrective Actions: Management has been making updates to its policies and procedures throughout 2024 to be in full compliance with GAAP. This exercise is anticipated to be complete by the end of the fiscal year.