Finding Text
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Mortgage Insurance Nursing Homes, Intermediate Care Facilities, Board and Care Homes, and Assisted Living Facilities
Assistance Listing Number: 14.129
Type of Finding: Other Matters
Criteria or specific requirement: Bank statements shall be reconciled promptly to the formal accounting records by persons other than those recording or handling cash or preparing and signing checks.
Condition: There was a lack of segregation of duties surrounding cash management for part of the
fiscal year.
Questioned Costs: None
Context: During our audit, we noted that bank reconciliations were prepared promptly, however, there was a lack of segregation of duties surrounding review by an independent person. 1 of 3 bank reconciliations tested were not reviewed by someone other than the preparer. It was noted that Webster did not have a formal bank reconciliation review policy in place from September through November 2023.
Cause: The entity has a small finance department.
Effect: Failure to have bank reconciliations reviewed by an independent person increases the risk of errors, omissions, or fraudulent activities going undetected. This could lead to financial misstatements and non-compliance with applicable regulations.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001.
Recommendation: CLA recommends the organization develops and enforces a policy requiring the independent approval of all bank reconciliations on a monthly basis.
Views of responsible officials: Management is in agreement with the finding and noted that this has been remediated during fiscal year 2024. Beginning in December 2023, Webster began implementing Silverstone Living’s policy regarding bank reconciliation preparation and approval. Bank reconciliations are prepared on a monthly basis by the Business Office Manager or the Assistant Controller and reviewed by the CFO.