Finding Text
Finding 2023-002: Invalid Journal Entries
Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over
journal entries posted to the Organization's records. Adjustments were needed to reverse duplication of
amounts included in both accrued wages and accrued compensated absences payable. Entries were also
needed to clear negative expense allocations within funds. Several revenue and expense items were
duplicated in 2023 rather than being offset against the appropriate receivable or payable booked in 2022.
Entries were also required to book the December food program receivable and reverse the prior year
deferred revenue.
Cause: The Organization had an inexperienced fiscal officer during parts of 2022 and 2023. The 2022
audit adjustments were not posted correctly or adequately reviewed resulting in errors carrying forward to
2023. There was inadequate review of 2023 balances during the year-end close process.
Effect: The effect of these deficiencies in internal controls was a $162,519 overstatement of assets, a
$114,949 overstatement of liabilities, a $128,880 overstatement of revenue, a $81,310 overstatement of
expenses, and a $47,570 overstatement of net assets. These adjustments resulted in the reversal of $45,320
in payroll related costs charged against the major federal program. See finding 2023-001.
Recommendation: We recommend the Organization perform a thorough year-end review which should
include comparing current balances to the prior year, reviewing details of account balances, as necessary,
and reviewing journal vouchers posted during the year for reasonableness, prior to providing the trial
balance for audit.