Finding Text
Finding No. 2024-001: Financial Reporting – Material Weakness Criteria An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) and grant reports in accordance with federal compliance requirements, including a robust financial close process at year end. Condition In fiscal year 2024, SERC’s accounting processes and internal controls over financial reporting were not functioning timely to support generating complete and accurate financial information. The books and records were not closed and finalized timely. Numerous adjustments to the trial balances were made, necessitating revisions to account reconciliations, and grant schedules. Cause SERC experienced staffing shortages and related difficulties during the fiscal year. Effect The books and records were not closed and finalized until several months after year end. Context SERC’s accounting processes and internal controls over financial reporting were not functioning properly. Recommendation We recommend that SERC maintain appropriately trained and experienced personnel. This will help ensure that the accounting processes and internal controls over financial reporting will function properly, and that the financial close process will be complete, accurate, and timely. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.