Finding Text
2022-003: Finding --- The Organization does not consistently reconcile its quarterly financial reports submitted to governmental agencies to the general ledger by grant program. Criteria --- Strong internal control over financial reporting and compliance with the federal grant requirements requires that financial statements submitted in interim reports be reconciled to the detailed accounting records. Title 2: Grants and Agreements, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires recipient of federal and state funds to maintain accurate, current and complete disclosure of the financial results of each federally-sponsored project. Condition --- The Organization does not have internal controls in place to ensure reconciliation of its quarterly financial reports submitted to governmental agencies to the general ledger by grant program. Context --- The Schedule of Expenditures of Federal Awards and State Financial Assistance was incorrect and required restatement. Effect --- Failure to reconcile interim reports submitted to governmental agencies to the general ledger by grant program increases the risk of errors, misstatements, or omissions in reporting federal and state expenditures. This could result in inaccurate financial reporting, noncompliance with the federal and state grant requirements and potential questioned costs or audit findings. Cause --- Management has not established a formal process or assigned responsibility to reconcile quarterly financial reports submitted to governmental agencies to the general ledger by grant program. Recommendation --- The Organization will implement a formal reconciliation process to ensure that quarterly financial reports are reconciled to the general ledger by grant program. This process should include documented procedures, assignment of responsibility, and review by appropriate personnel. Management response --- Management will develop and implement written procedures to improve their reporting process in accordance with Uniform Guidance and New Jersey 15-08-OMB.