Finding Text
Finding 2023-001 Year-End Close Process/Account Reconciliations
Information on the Federal Programs: ALN 14.235
Criteria or Specific Requirement: In accordance with CFR 200.302 the financial management
system of each non-Federal entity must provide for effective control over, and accountability for, all
funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and
assure that they are used solely for authorized purposes.
Condition: The fiscal year-end schedules supporting various asset and liability accounts were
incorrectly prepared and required revision, resulting in significant adjustments to NEW's unaudited
financial statements. Multiple trial balances were received throughout the audit process. A significant
amount of time was spent by management during the audit process reconciling accounts resulting in
an audit delay. The delay resulted in additional audit work performed after the original end date of the
initial field work. These issues most likely resulted in management and the Board reviewing unreliable
internal financial information throughout the year, and this also represents a deficiency in adhering to
NEW's internal control policies and procedures.
Cause: A proper internal controls process, which would include a supervisory review and approval
process (with physical or electronic evidence of such a process), was not in place during the fiscal
year under audit.Effect or Potential Effect: Significant adjustments were proposed by management during the audit.
Additionally, any internal financial statements produced by management during the year (and as of
fiscal year-end) were not properly stated in relation to the financial statements taken as a whole (and
therefore could not be relied upon).
Questioned Costs: None
Context: Our audit procedures consisted of an initial review of the financial statements and related
supporting schedules, which led to management having to perform multiple subsequent reviews (and
corrections) following attempts to correct earlier provided schedules and financial statements. The
condition noted is deemed to be systematic in nature.
Identification as a Repeat Finding, if Applicable: Finding 2022-001
Recommendation: We recommend that NEW ensure that each account is properly reconciled on a
monthly basis.