Finding Text
Criteria: Internal controls should be in place to ensure that investment accounts and transactions are reconciled to prevent or detect unauthorized or inaccurate recording or presentation. In addition, a review of the reconciliation should be performed by an individual other than the individual performing the reconciliation. Condition and Context: Throughout the performance of audit procedures, the auditor identified the following instances where appropriate reconciliations were either not performed or were not reviewed by an individual other than the individual performing the reconciliation: The investment account were not adjusted to supporting documentation. Certificates of deposits were matured but left in a balance sheet account. Stock sales were never recorded. Cause: The Organization has limited written procedures for the reconciliation process. The limited procedures lack requiring the timely performance of specific reconciliations and providing instruction for performing the reconciliation including review by an individual other than the individual performing the reconciliation. Effect: The lack of reconciliation and review may result in the occurrence of unauthorized or inaccurate activity recorded within the Organization’s records and reflected on the interim financial statements. Recommendation: We recommend the Organization develop written policies requiring timely reconciliations including a documented review by an individual other than the individual performing the reconciliation. Monthly and annual closing processes should be documented, performed, and reviewed. Management Response: Processes are being implemented to ensure appropriate reconciliations and review process, see corrective action plan. Repeat Finding: This finding is a repeat of prior year Finding 2024-001. Although management implemented improvements in certain areas, the deficiency was not fully corrected during the current year.