Finding Text
Although the accounting records are maintained using an integrated accounting system and transactions are substantially recorded on a daily basis by fund, the accounting function is not maintained sufficiently current to ensure that all necessary adjusting entries, classifications, reconciliations, and closing procedures are completed on a timely basis throughout the fiscal year. As a result, interim and annual financial closings are not completed within a reasonable period after year-end, and the accounting records are not fully adjusted and reconciled for audit purposes until several months after fiscal year-end. This condition delays the preparation and availability of reliable financial information and significantly prolongs the annual audit process. The delays in completing the accounting close increase the complexity of the audit engagement, require substantial post year-end adjustments and reconciliations, and hinder timely compliance with financial reporting requirements applicable to governmental entities receiving federal financial assistance. In addition, due to the limited staffing within the finance and accounting department, a substantial portion of the accounting, reconciliation, financial reporting, and oversight responsibilities rests with a single individual. This concentration of responsibilities may create incompatibility of duties and increases the risk of errors, omissions, or conflicts in internal control functions. It is noted, however, that the Company ultimately records and properly classifies expenditures and transactions within the accounting records and adequately segregates and identifies transactions by the applicable funds and grants. Furthermore, the accounting software utilized by the Company is considered robust and capable of supporting a timely and effective accounting and financial reporting process.