Finding 395604 (2023-001)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-05-01
Audit: 305210
Auditor: Horne

AI Summary

  • Core Issue: There was a breakdown in the process for timely and complete monthly reconciliations, leading to inaccuracies in financial statements.
  • Impacted Requirements: Internal and year-end financial information must be complete, accurate, and prepared on time for effective management.
  • Recommended Follow-Up: Implement systematic reviews and timely reconciliations to prevent future material misstatements in financial reporting.

Finding Text

Criteria: In order for management and the Board of Directors to effectively manage the Medical Center, the internal and year-end financial statement information must be complete, accurate and prepared in a timely manner. Effective reviews over the transactions must be in place to ensure material transactions are appropriately recorded in the financial statements. Condition: Our audit procedures revealed that there was a breakdown in the systematic method of ensuring that timely and complete monthly reconciliation and closing procedures take place. As a result, material adjustments were made to investments and net patient accounts receivable during the audit. Cause: Various general ledger accounts were not reconciled, analyzed and/or adjusted in a timely manner. Effect: The Medical Center’s consolidated financial statements contained material misstatements which were corrected during the audit process. The Medical Center’s monthly and year-end internal financial statements were not accurate.

Corrective Action Plan

During fiscal year 2023, the Medical Center dealt with multiple challenges including the implementation of a new accounting system and the loss of a key employee within the accounting department of the Medical Center that led the implementation of said new accounting system. Unfortunately, these challenges resulted in unfavorable conditions for the accounting department, as they had to learn the new accounting system without guidance from the employee that led the implementation. Moving forward, the Medical Center is focused on adequately training employees to use the new accounting system properly and delegating tasks including monthly reconciliations and closing procedures across the team. Additionally, the accounting department has already hired an additional accountant to help complete monthly reconciliations and closing procedures on a more timely basis. Lastly, we are implementing monthly check point meetings for the entire accounting team to help hold team members accountable for accomplishing their assigned tasks and responsibilities as efficiently as possible. Stuart Hill, CFO, is responsible for the implementation of this corrective action plan. As of 4/23/2024, the corrective actions have been fully implemented.

Categories

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Other Findings in this Audit

  • 972046 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Funds $14.13M