Finding #2023-002 – Lack of Financial Close Process and Delayed Accounting
Condition: Cash and other accounts were adjusted during the audit process. Many audit journal entries were required to record and adjust activity. Multiple grant claims were not filed throughout the year and large adjustments were needed to record revenues.
Effect: Financial reporting from the District’s general ledger could be materially misstated. Delayed grant claims could cause cash flow issues.
Cause: The District did not have procedures in place to ensure that all transactions were properly recorded on the general ledger prior to the audit.
Criteria: During the close of the monthly financial statements, other balances should be reconciled to subsidiary detailed listings. Grant claims should be reconciled to the general ledger and submitted throughout the year. Receivables should be recorded as of year end as needed.
Recommendation: The District should develop procedures to timely reconcile cash and other balance sheet accounts. The reconciliations should be reviewed by someone other than the person preparing the reconciliations. The reviewer should initial and date the reconciliations when the review is complete. Reconcile payroll liabilities. Develop procedures to review and submit grant claims throughout the year and reconcile to the general ledger.
Response: The District will work to establish procedures to reconcile accounts monthly and grant claims are reconciled and submitted throughout the year. Marshall School District's Corrective Action Plan:
School Business Manager Kristin Wilkinson will engage in the following tasks to better understand and put processes in place to address the finding: Meet with experienced School Business Managers Wendy Brockert and Tim Stellmacher in regards to reconciling payroll liabilities. When By 6/30/2024. Attend WASBO University class through Wisconsin Association of School Business Officials, specifically Internal Controls for the School Business Office. When Ongoing. This specific course completed 3/19/2024. Complete one full year as School Business Manager at Marshall Public Schools (first position in this role in any district) learning about the role, structures and processes that are in place, need to be put in place, and need to be refined. When May 2, 2024. Reconcile cash and balance sheet accounts monthly. Review will be done by mentor School Business Manager or by Accounts Payable Specialist. When By March 30, 2024. Review and submit grant claims throughout the year and reconcile to the general ledger. When Ongoing work By 6/30/2024. Contact Person: Kristin Wilkinson, Business Manager Anticipated Completion Date: 6/30/2024