Finding Text
SIGNIFICANT DEFICIENCY FINDING 2024-004 - CASH MANAGEMENT AND RECONCILIATION OF ACCOUNTS Program information This finding applies to all federal awards. Repeat Finding from Prior Year No Condition The District did not perform timely reconciliations of its cash and investment accounts throughout the year. Reconciliations were delayed, in some cases extending several months after the related reporting period. This lack of timely reconciliation increases the risk of errors or irregularities going undetected and complicates accurate reporting of federal grant expenditures and reimbursements. Criteria Federal grant administration requires effective cash management practices, including timely reconciliation of cash and investment balances, to ensure that federal funds are properly safeguarded, accounted for, and reported in accordance with Uniform Guidance. Context During the audit, it was noted that the District's reconciliations of bank and investment accounts were not consistently completed on a monthly basis. The delays in reconciliation hindered management's abi lity to ensure that cash balances reported for federal programs were accurate and supported by underlying records. Cause The condition primarily resulted from limited staffing resources and weaknesses in internal controls over cash management. Oversight responsibilities were not adequately structured to ensure reconciliations were completed timely and reviewed on a consistent basis. Effect Failure to reconci le cash and investment accounts on a timely basis increases the risk of misstatement of financial information and could result in errors in the reporting of federal expenditures and reimbursement requests. This deficiency impairs management's ability to effectively monitor cash flow and ensure compliance with federal requirements. Questioned Costs & Sampling Method Not applicable Recommendation We recommend that the District strengthen internal controls over cash management by ensuring that all cash and investment accounts are reconci led to the general ledger on a monthly basis and that reconciliations are subject to supervisory review. Enhanced monitoring procedures will help ensure the accuracy of financial reporting and compliance with federal grant requirements. Response and Views of Responsible Officials See corrective actions plan.