Finding Text
2023-012 Financial Statement Reconciliations/Tie-In Procedures Material Weakness This is a repeat finding. The prior-year’s auditing finding number is 2022-012. Condition: A weakness existed in the overall reconciliation/tie-in procedures performed over the Housing Authority’s financial statement accounts for the fiscal year ended March 31, 2023. Financial accounts were not reconciled on a timely, monthly basis. The major areas where reconciliation procedures were weak included: A) Bank Reconciliations B) Grant Receivables C) Account Receivables and associated allowance for doubtful accounts D) Capital Assets E) Accounts Payable F) Payroll and Other Current Liabilities Criteria: OMB Uniform Guidance states the following in section 200.302, “(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.327 Financial reporting and 200.328 Monitoring and reporting program performance. Cause: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. Effect: In the course of performing the audit, the auditor recommended 4 adjusting journal entries be made to the financial statements for fiscal year ending March 31, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature. Recommendation: The Housing Authority should adopt written reconciliation and tie-in procedures into its financial policies and procedures manual. These policies should require timely reconciliations to take place as defined under policy. Views of Responsible Officials: See Corrective Action Plan.