Finding Text
Finding Type Material Weakness Condition During the audit, we noted a significant amount of adjusting journal entries were required to be recorded in order to adjust the year end balances to their appropriate amounts. This includes journal entries related to the Organization?s funding sources as of September 30, 2022. Criteria Accounting books and records should be complete and accurate and include all relevant documentation to support the amounts. Cause Formal procedures related to proper accounting practices were not in place to ensure all activities were addressed and reported appropriately in conformity with generally accepted accounting principles. Effect General ledger accounts were not analyzed and reviewed by management prior to the start of the audit to ensure financial records were properly recorded. Recommendation We recommend the Organization review and update, as necessary, its written procedures regarding processing and recording of transactions and monitor such processing to ensure that transactions are processed and reported and reconciled in an accurate manner. This includes maintaining documentation and support for each entry in an orderly fashion. Furthermore, the Organization should review each funding source agreement on a timely basis to verify the accounting treatment is in conformity with generally accepted accounting principles. Response Although management acknowledges that the number of journal entries was less than prior year, it will continue the implementation of new accounting processes and grant accounting treatment recommended from the current and previous year audits to limit the number of changes to the financial statements presented at the beginning of the audit to ensure that the journal entries recorded during future audit periods are non-substantive.