Finding 1104701 (2024-002)

Item 2024 - 002: Reconciliation of the Town’s Accounting Records. Condition and Context: During the course of the audit, we proposed 20 journal entries to be recorded by management of which 8 are material. Criteria: Review and monitoring procedures are an integral part of internal control. Cause: Lack of review by those charged with governance could allow financial irregularities and errors to go undetected. Effect: Errors, omissions, and irregularities may be present and go undetected by management. Recommendation: We recommend that reconciliations be performed monthly and any variances should be investigated immediately. Management’s Response: This was mostly due to turnover of Town personnel and implementation of a new accounting software, which resulted in issues with beginning balances and reconciliation of accounts. Management realizes the importance of performing reconciliations and is in the process developing processes for future reconciliations.