Finding Text
Criteria: Effective internal control over cash requires bank reconciliations and outstanding checks to be reviewed on a timely basis and stale items to be investigated and resolved. Per standard cash management practices, checks outstanding over 180 days should be reviewed and voided if no longer valid. GAGAS emphasizes the importance of safeguarding public resources through proper monitoring and follow-up procedures. Condition: Our review of the December 31, 2025 outstanding check listing noted multiple checks older than 12 months that remained outstanding. The checks had not cleared the bank and had not been voided, reissued, or otherwise resolved. The Entity’s operating bank account included 62 checks and other paymentside reconciling items older than 12 months totaling $37,068 and 27 deposits and other credit-side reconciling items older than 12 months totaling $10,636. In total, the reconciliation included 89 stale reconciling items with gross stale-item activity of $47,704. The payment-side items exceeded the credit-side items by $26,432, which represents the net stale-item exposure before considering which individual items required adjustment. Certain items had remained unresolved for several years. Management recorded an audit adjustment to increase cash by $18,102 for stale reconciling items determined to require correction. The accounting adjustment corrected the portion of the cash balance addressed by the entry; however, the items had not been identified and resolved through the Entity’s normal bank reconciliation review process. This condition was previously reported as Finding 2024-1. Cause: Management did not implement or consistently perform a process to periodically review, research, and resolve stale-dated checks. Effect: Failure to resolve stale checks may result in misstatement of cash and related liabilities and increases the risk of duplicate payments or improper disposition of amounts still owed to vendors or employees. Recommendation: We recommend management immediately research and resolve all stale checks and implement a documented procedure to review outstanding checks at least quarterly. Each stale check should be voided, reissued, or otherwise appropriately resolved based on the status of the underlying obligation. Management Response: Management concurs with this finding and will review old and outstanding checks and deposits.