Finding Text
2023 – 001
Type of Finding:
• Material Weakness in Internal Control Over Financial Reporting
Condition: Multiple audit entries were necessary to properly state account balances including a prior period adjustment to beginning net assets. Account reconciliations were not performed timely and accurately. Therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the organization’s internal controls.
Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP.
Effect: The lack of controls in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected.
Cause: The investments and related earnings lacked a proper reconciliation and review. This resulted in a material misstatement of cash equivalents and the related earnings on the investments as well as beginning net assets.
Repeat finding : This is not a repeat finding.
Recommendation: The organization should evaluate their financial reporting processes and controls, including the expertise of its internal staff, to determine whether additional controls over investments can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP.
Views of responsible officials and planned corrective actions : Management will continue to rely on the audit firm to draft the financial statements and the related notes to the financial statements, and will review, approve, and accept responsibility for the annual financial statements prior to their issuance.