Finding 1171332 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-01-30

AI Summary

  • Core Issue: The Center failed to consistently complete accurate balance sheet reconciliations, leading to delays and incomplete documentation.
  • Impacted Requirements: Monthly or quarterly reconciliations must include supporting documentation and timely resolution of discrepancies to justify account balances.
  • Recommended Follow-Up: Continue training staff on accounting practices and ensure all significant accounts are reconciled promptly to meet audit deadlines.

Finding Text

Criteria: A properly designed system of internal control over financial reporting includes timely reconciliations of balance sheet accounts on a monthly or quarterly basis, depending on the account. Comprehensive reconciliations should include sub-ledger or alternative system documentation that supports and justifies the balance within the account as reflected in the general ledger and demonstrates a roll forward from the prior period which ties to the transactions recorded in the general ledger, and ensures any reconciling items are timely addressed and cleared. Balance sheet reconciliation which simply demonstrate debits and credits that make up the balance of the account do not demonstrate the needed criteria to justify balances. Condition: The Center did not consistently complete balance sheet reconciliations which were accurate, and that adequately justified the balances within the account throughout the year or at year end close. These were completed only for the audit and some were not completed until January 2026. Cause: The Center experienced significant change over the past couple of years, including turnover in some key accounting and IT positions. Current personnel are still in the process of being trained and becoming familiar with new software programs. The complexities of its operations and the amount of change has caused the Center to lose focus of essential accounting activities required to produce timely and accurate financial statements. Effect: The production of audit schedules at year end were substantially delayed as a result of reconciliations having to be completed or corrected. Because of the delay in having timely reconciled general ledger accounts, management made several adjustments in preparation for the audit. This delay may put the Center at risk of not having the audit completed by the due date. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all significant general ledger accounts are reconciled on a timely basis, as is appropriate for the account, in a manner that supports the account balance, with any reconciling items being addressed in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.

Corrective Action Plan

Audit Finding 2025-1: During the audit it was noted that certain general ledger accounts were not analyzed and reconciled on a timely basis. Management Response: The Center has continued to experience turnover in key accounting positions. New programs with new software updates have required additional staff training. The Medicaid Eligibility Renewal process by the State now has Renewals required every 12 months while prior to covid the Medicaid Program Renewals were required every 24 months. This has caused serious issues with the reconciliation process for Several of our Medicare, Medicaid, HCS and TXHMLV Accounts. We booked conservatively what we thought we could anticipate for Revenues assuming that we would begin receiving Reinstatement of Benefits at a somewhat regular Renewal Rate. We are allowed to back bill at least 90 days once approval is given. The Renewal Process is taking way longer than it used to, significantly complicating the reconciliation process, especially at year end with the need for separation of Revenue by Fiscal Years (matching process of Revenue with the same period Expenditures) Management will continue to train existing employees on significant accounting issues and IDD Management has recently begun using the Medicaid Lost Report to better anticipate lapses in upcoming Renewals of Consumers. We will also begin closing out our billings for the prior Fiscal Year earlier than we currently do. Any prior billings (Rebills) occurring after this established cutoff date (Medicare/Medicaid) will be reflected in the current year’s revenue and receivable balances. Name and Title of contact person responsible for corrective action: Dan Monson, CFO, 1504 S Texas Avenue. Bryan, TX 77802, 979-361-9802, Employer Identification Number: 74-1793265

Categories

Reporting Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
93.696 CERTIFIED COMMUNITY BEHAVIORAL HEALTH CLINIC EXPANSION GRANTS $961,913
93.791 MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION $420,000
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $111,843
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $83,672
93.667 SOCIAL SERVICES BLOCK GRANT $60,844
93.778 MEDICAL ASSISTANCE PROGRAM $55,181
93.958 MONEY FOLLOWS THE PERSON REBALANCING DEMONSTRATION $8,357
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $6,279