Finding 1150296 (2023-001)

2023-001 – Material Weakness in internal control Condition: As part of the financial statement audit, a material weakness in internal control was reported related to untimely invoicing under contracts and performance and review of monthly bank and credit card reconciliations, and lack of controls over cash receipts and cash disbursements. Criteria: Internal controls should be in place that provide reasonable assurance that invoicing will occur timely and proper approvals, review, and controls are in place over bank and credit card reconciliations, cash receipts, and cash disbursements. Cause: There is a lack of procedures in place around these key accounting processes. Effect: A material misstatement in financial reporting could occur due to this deficiency. Recommendation: Processes and procedures should be implemented that ensure (1) timely invoicing under contracts, (2) proper completion and review of monthly bank and credit card reconciliations, and (3) proper controls related to processing, approval, and review of cash receipt and cash disbursement transactions. Views of Responsible Officials and Planned Corrective Actions: Basic Health International, Inc. agrees with the finding and has a plan in place to develop and implement procedures to correct the finding.