Finding Text
IImprove Controls over Accounting Records Statement of Condition: ESAC did not have procedures in place to monitor and properly maintain internal control over transactions and accounting records. Bank reconciliations were not timely and reconciliations of accounts payable and grants receivable to accounting records had been incorrectly prepared. Criteria: Internal controls must be monitored to ensure that they are operating as intended. A process of monitoring internal control will ensure that controls are operating consistently, and thus, effectively. Internal control over accounting records requires timely reconciliations. Prompt reconciliation of accounts will reduce the risk that errors and irregularities, intentional or unintentional, will go undetected. To ensure that reconciliations are being prepared effectively, the control must be monitored, and necessary corrective action must be taken based on regular assessment. Cause: ESAC’s unexpected management and staff transitions put a strain on the new staff’s ability to complete their responsibilities. Effect: Accounting records for the fiscal year ended June 30, 2024, contained several undetected and uncorrected errors. At year-end, cash balances were not properly reconciled, and accounts payable and grants receivable did not reconcile to the corresponding revenue and expenditure general ledger account totals. Recommendation: Monthly reconciliations should be performed. Management should review the reconciliations on a monthly basis and make appropriate corrections to accounting records, if necessary. Management should also monitor internal control to assess the quality of controls, and take corrective action if controls are not operating effectively. Management Response: Management is in agreement with the recommendation and has updated their policy and review process subsequent to year-end.