Finding Text
Finding 2022-001 ? Internal Controls over Cash Reconciliations and Interfund reconciliations ? Significant Deficiency ? Noncompliance and Qualified at Single Audit Level ALN No. 14.850 & 14.871 Criteria: Uniform Administrative Guidance and Standards for Internal Control in the Federal Government requires adequate internal controls over financial reporting to ensure that transactions are properly recorded and accounted for to permit the preparation of reliable financial statements and demonstrate compliance with laws, regulations, and other compliance requirements. Additionally, the Uniform Financial Reporting Standards require adequate internal controls over reporting. Condition: The organization does not completely and accurately reconcile the cash accounts on a consistent basis. There were imbalances in the bank reconciliations during the year. Consequently, at year-end there was adjustments to interfund and to cash accounts that should have been corrected during the year. Additionally at the end of the year there was an imbalance in the interfund accounts of around $287,331.69. The PHA did not adequately record prior year audit adjustments but rather corrected the beginning equity and interfund entries. Together with these adjustments and the cash imbalances there was approximately $201,318.69 in prior period adjustments which could not be determined. Effect: The failure to reconcile the checking accounts and interfund accounts can result in misstating the financial operating results for any given period. Cause: The Authority does not properly maintain and perform bank reconciliations and interfund reconciliations on a consistent monthly basis. Recommendation: We recommend that the Authority reviews their current procedures for monthly reconciliations and the fiscal year close to ensure accuracy of financial reporting to include the items mentioned above. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.