Finding Text
Condition: Management is not accounting for the Workforce Investment and Opportunity Act (WIOA) and Work First New Jersey grant activity in the District’s financial reporting system. This finding is repeated from prior year. Criteria: A central financial reporting system is an essential foundation of an internal control system over financial reporting and all financial activity should be accounted in such financial reporting system. As a compensatory control, regular and timely closing procedures can be utilized to adequately integrate any activity not initially accounted for, into the financial reporting system. Context: WIOA grant activity totaling $1,938,440 in expenditures was recorded in the District’s financial reporting system at year end with manual journal entries. Cause: WIOA and Work First New Jersey grant activity is being accounted for in external worksheets that are being integrated in the District financial reporting system in summary with manual journal entries at year end. As expenditures initially incurred and subsequently reimbursed by the WIOA and Work First New Jersey grant are accounted in the District financial reporting system, there is a lack of sufficient audit trail for actual expenditures incurred by WIOA and Work First New Jersey grant and rights and application of related reimbursements. Effect: Material misstatements of expenditures and rights to reimbursements may exist that management or employees, in the normal course of performing their assigned functions did not prevent, or detect and correct, on a timely basis. Recommendation: Management account for the Workforce Investment and Opportunity Act (WIOA) and Work First New Jersey grant activity in the District’s financial reporting system or perform regular and timely closing procedures to adequately integrate detail of grant reporting with the financial reporting system. View of Responsible Official and Planned Corrective Action: Management will account for the WIOA and Work First New Jersey grant activity in the District’s financial reporting system. The District has contracted an outside consultant to assist with corrective actions.