Finding Text
Criteria: Sound financial reporting controls and COSO principles require timely, documented monthly bank reconciliations to ensure completeness and accuracy of cash and to detect errors or irregularities promptly. GAAP also presumes monitoring controls around cash balances and timely reconciliation to support accurate presentation in the financial statements. Condition/Context: For the year ended December 31, 2024, bank reconciliations for 11 of 12 months were not completed until mid-June 2025 (approximately six to fifteen months late). Cause: Staffing turnover and system/process changes during 2024, coupled with competing operational priorities, delayed routine month-end close activities. Effect/Possible Effect: Increased risk that cash balances and related activity could be misstated or that errors/irregularities could remain undetected for extended periods. Reduced usefulness of interim financial information for management and the board. Questioned Costs: Not applicable (financial statement control finding). Recommendation: Establish a written close calendar requiring completion and review of all bank reconciliations within 10 business days after month-end; implement a standardized reconciliation checklist with dated preparer/reviewer sign-offs; monitor timeliness monthly and report status to the finance committee until sustained compliance is achieved. Views of Responsible Officials: Management’s response and corrective action plan will be provided in the separate Corrective Action Plan.