Finding Text
Material weakness in internal control and issues of non-compliance with state and federal laws and regulations
Federal Program: 17.258, 17.259, 17.278 WIOA Cluster
Criteria: The Uniform Guidance – 2 CFR 200.508(b) and 2 CFR 200.508(d) – state: “The auditee must: …(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s) , or nine months after the end of the audit period.”
Condition: NEWDB had difficulty closing its accounting fiscal year in a timely manner due to budget revisions from the decertification of another Oklahoma workforce entity. The auditor did not receive a combined trial balance until January 24, 2023. Upon receipt of the trial balance, the auditor determined that the trial balance did not match the supporting general ledger or other subsidiary ledgers. On March 2, 2023, the auditor received an email stating that NEWDB would have to get with their software consultant in order to obtain updated reports from their software. As a result, the final trial balance and detailed general ledger were not received by the auditor until May 11, 2023. Additionally, there appears to be an overall lack of understanding with NEWDB accounting personnel of how the individual subledgers interact with the general ledger and trial balances as well as what would constitute program services – revenue and expense versus support services – revenue and expense.
Cause and Effect: Inadequate control over month end and year end closing and financial statement preparation appear to be the cause of this issue along with inadequate training with the financial reporting software. Without accurate, timely information the financial statements and schedule of expenditures of federal awards could be misstated.
Recommendation: Additional training should be provided for the accountants at NEWDB to allow them to properly run reports from their software. NEWDB should request “saved” reports that could be standardized to run monthly or annually with extra training to allow for the accountants to produce ad hoc information. We further recommend training be provided in governmental and fund accounting to assist accounting personnel’s understanding of the overall accounting processes.
Responsible Official's Response:
The NEWDB fiscal team will undergo supplementary training on MIP reporting procedures, which is currently in the scheduling phase and will occur within this quarter. Furthermore, as part of their ongoing professional development, the fiscal team will also engage in additional training related to governmental and fund accounting processes.