Finding Text
Finding #2022-001 Type: Material Weakness over Financial Reporting Condition/Context The Organization is behind by more than six months in financial reporting and monthly closing procedures including reconciliations of key accounts on a timely basis, and a significant volume of transactions not timely entered into the accounting system. Controls, including review processes, over many functions were not performed timely during a significant portion of the year. Year-end accounts were not reconciled until the audit was underway resulting in material audit adjustments. Cause The Organization experienced significant turn-over in the accounting department which resulted in financial policies and procedures not being followed. Effect Financial statements could be materially misstated. Recommendation We recommend the Organization follow established policies and procedures and implement appropriate oversight and controls to ensure accounting records are completed and reconciled on a timely basis including a monthly close process and accurate financial reports made available to management and the board. Management Response We concur with the audit finding and recommendations for the defined period and have pre-emptively been on a path to remedy these problems. Our actions include: ? Transaction processing and key account reconciliations are up to date as of 7/1/2023. ? Development of controls over review processes began in March of 2023 ? Implementation of new and modified procedures to enhance the control environment is on-going as department functionality is reviewed and changed. This includes control & oversight established over our material subledgers this calendar year. ? Monthly closings, including financial reporting, are in development and scheduled to start before the end of the fiscal year 10/31/2023. ? To achieve compliance OSF: ? Hired qualified accounting contractors to perform timely and accurate entries in our financial system of record beginning January 2023. ? Hired an Interim Executive Director, Tyler Hokama, with executive experience at multiple Fortune 500 companies on June 1, 2023. The Interim Executive Director is currently filling permanent, qualified Finance/Accounting roles within the organization, securing professional knowledge and actively overseeing the stabilization of Finance systems and processes.