Finding 1086065 (2023-001)

Finding 2023-001 - Material Adjustments Criteria: Management is responsible for reconciling the accounts at end of year and ensuring accounting records are kept in accordance with generally accepted accounting principles (GAAP). Condition: There were insufficient internal controls over financial reporting requiring material audit adjustments during the audit to prevent the consolidated financial statements from being materially misstated. Cause: Due to staffing turnover and shortages all required entries needed were not recorded and management relied on auditors to propose entries after audit procedures. This is a repeat finding.Effect or potential effect: Most adjustments were due to staffing issues or lack of knowledge of GAAP with new staffing to properly make the required adjustments. The risk with this condition is that necessary adjustment to the consolidated financial statements to record material misstatements may be missed, and there is no control in place to detect and correct this condition. Recommendation: The Organization and accounting industry in general have had some significant staffing issues over the past few years that have led to the issues noted. The Organization needs to:  Assess accounting staff to ensure you have the correct number for size of Organization and proper skill set.  Ensure processes and internal controls are documented and staff has appropriate training. Views of responsible officials: See attached.