Finding Text
2020-012 Financial Statement Reconciliations/Tie-In Procedures
Material Weakness
This is a repeat finding. The prior-year’s auditing finding number is 2019-007.
Condition: A weakness existed in the overall reconciliation/tie-in procedures performed over the
Housing Authority’s financial statement accounts for the fiscal year ended March 31, 2020.
Financial accounts were not reconciled on a timely, monthly basis. The major areas where
reconciliation procedures were weak included:
A) Bank Reconciliations
B) Grant Receivables
C) Accounts Receivable and associated allowance for doubtful accounts
D) Accounts Payable
E) Payroll and Other Current Liabilities
Criteria: OMB Uniform Guidance states the following in section 200.302, “(2) Accurate,
current, and complete disclosure of the financial results of each Federal award or program in
accordance with the reporting requirements set forth in §§ 200.327 Financial reporting and
200.328 Monitoring and reporting program performance.
Cause: Lack of written policies and procedures over financial tie-in procedures that identify who
is responsible for performing these tie-in/reconciliation procedures.
Effect: In the course of performing the audit, the auditor recommended 9 adjusting journal
entries be made to the financial statements for fiscal year ending March 31, 2020. Many of these
adjustments could have been avoided if timely reconciliation and tie-in procedures had been
conducted by the finance department. Many of these audit adjustments were material in nature.
Recommendation: The Housing Authority should adopt written reconciliation and tie-in
procedures into its financial policies and procedures manual. These policies should require
timely reconciliations to take place as defined under policy.