Finding Text
CONDITION: During 2024, audit adjustments were made to the consolidated financial statements to properly record transactions between CHN and its affiliated entities. Procedures were not in place to ensure these transactions were properly reflected in the general ledger and financial reporting schedules. CRITERIA: Systems and procedures should provide for identification of general ledger accounts that require adjustment to reflect transactions between CHN and its affiliated entities. CAUSE: Systems and procedures were not in place to ensure timely identification and review of transactions between CHN and its affiliated entities. EFFECT: With no procedures in place to ensure timely identification and review of transactions between CHN and its affiliated entites, there is potential that financial reports, including the schedule of expenditures of federal awards, will be misstated and not filed accurately to third parties. RECOMMENDATION: Systems and procedures should be established by management to allow for timely identification and recording of transactions between CHN and its affiliated entities. Journal entries to record these transactions in the general ledger should be reviewed and approved by management.