Finding Text
Condition Found: During our testing, we noted that the School was not reconciling the accounts receivable subsidiary ledger to the general ledger throughout year. Criteria: The accounts receivable subsidiary ledger should be reconciled to the general ledger on a monthly basis. This practice serves as a check on the accuracy of the record-keeping process and the validity of account balances. Any differences should be investigated and resolved as soon as possible. Lastly, the reconciliation should be reviewed by a member of management who is knowledgeable in such matters. Cause: During the year, the School had significant issues with their student management system capturing all transactions associated with student accounts. In addition, management did not perform a proper reconciliation of the ending account balance within the general ledger. Possible Asserted Effect: This resulted in adjusting the receivable and corresponding tuition revenue of $58,573 as of June 30, 2023. Repeat Finding: There was not a similar finding in the prior year. Recommendation: We strongly suggest that procedures be established to ensure that accounts receivable balances are reconciled between the general ledger and the accounts receivable subsidiary system in a consistent and timely manner to prevent further discrepancies. Management Response: The School made the required adjustments to its accounting records. The School is reviewing its accounting policies and procedures and the recommendations above. The School will update its procedures during fiscal year 2024.