Finding Text
Condition – During our audit, Wipfli LLP proposed a number of adjusting journal entries. Although the net impact of the adjustments to the financial statements only resulted in a reduction in the decrease in net assets reported of approximately $700,000, there were still a number of material adjustments which net to this overall change amount, including the Organization’s cash account which needed additional reconciliation due to information systems transaction posting issues. The adjusting journal entries were based on financial calculations and audit procedures performed by Wipfli LLP that were not performed during the Organization’s normal financial close process. Management of the Organization did not the cash balance needed additional review and requested assistance during the audit process with this area. Since the Organization’s internal control did not discover these adjustments prior to our audit, a material weakness exists in the Organization’s controls. This is a repeat finding from 2023, Finding 2023.003.
Criteria – Material adjusting journal entries not prepared by the Organization are considered to be an internal control weakness.
Effect – Proper recording and reporting of financial information may not occur in a timely manner.
Recommendation – We recommend that all accounts be reconciled and adjustments be posted to the accounting records on a quarterly basis, at a minimum.
Management’s Response – The Organization will work to establish policies and procedures to reduce the number of adjusting journal entries proposed by the auditors.