Finding Text
Department of Health and Human Services,
Special Programs for the Aging – Title III, Aging Cluster
Assistance Listing Number(s): 93.044, 93.045, and 93.053
2022-002: Maintenance of the General Ledger
Criteria: The Corporation is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data.
Condition: The Corporation currently maintains its general ledger on the cash basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board. We further noted that several expenditures were not recorded in the proper accounts, and cash receipts are being recorded against expense accounts. We also noted transactions were recorded in the incorrect period.
Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data.
Cause: There are no procedures in place to ensure records are kept on an accrual basis.
Identification of a repeat finding: This is a repeat finding from the immediate previous audit.
Recommendation: We recommend that the Corporation implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end. We further recommend that care be taken to ensure that all transactions are recorded in the correct period.
Views of responsible officials and planned corrective actions: The Corporation agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report.