Finding Text
Condition
During our audit, we identified several key accounts that had not been reviewed as of June 30, 2023. These accounts included: accounts receivable, revenue and long-term debt. As a result, the financial statements as of and for the year ended June 30, 2023, required additional time and analysis before the financial statements could be finalized and available for issuance. This also required audit adjustments that had a negative impact on net assets of $1,407,187.
Criteria
Per the Uniform Guidance, the School must maintain an adequate system of internal control over financial reporting in order to initiate, authorize, record, process and report financial data reliably in accordance with generally accepted accounting principles.
Additionally, § 200.510 requires the auditee to prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited.
Cause
The School does not have adequate internal controls over financial reporting in place to ensure supervisory review and analysis for certain key accounts on a timely basis.
Effect
The delay in completing account analysis for the financial statement accounts could allow for misstatements, errors and irregularities to go undetected.
Recommendation
We recommend the School continue to reinforce its processes and procedures to ensure reconciliations and account analysis are completed and reviewed by appropriate supervisory personnel. The School should ensure accurate interim and year-end financial statements.
Questioned Costs
None.
Managements Response
Management agrees with the finding. See Schedule of Correction Action Plans.
Auditor’s Conclusion:
Finding remains as stated.