Finding 390576 (2023-001)

Finding 2023 - 001 Reconciliation of General Ledger Accounts Criteria Reconciliation of statement of financial position accounts is a check on the accuracy of the record-keeping process and maintains general ledger balances on a timely and accurate basis. Condition During our audit we noted statement of financial position accounts were not being properly reconciled to the general ledger and contained obvious misstatements. These included accounts receivable, preschool receivables, accounts payable, and deferred revenue for the year ended June 30, 2023. Cause A lack of timely reconciling, monitoring, and incomplete internal control policies and procedures resulted in a weak control environment and the inability to detect misstatements to the financial statements. Effect A lack of monitoring and proper reconciling of accounts, in accordance with the policy and procedure manual, could result in misstatements in the Organization’s financial statements going undetected beyond a reasonable period. Recommendation We recommend that management strengthen its system of internal controls by reviewing the policy and procedure manual, updating and implementing internal control procedures mandating timely reconciliations, and assigning monitoring responsibilities as necessary. Further, we recommend that management allocate necessary resources and provide training and development to accounting staff. Repeat Finding Yes – Modified: 2022-001 Control Environment and Monitoring of Control Procedures, 2022-002 Support for Journal Entries Views of Responsible Officials and Planned Corrective Action See the Organization’s Corrective Action Plan on page 32.