Finding 498876 (2023-003)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-09-27

Audit: 321663

Organization: Wisconsin Women's Business Initiative Corporation (WI)

Auditor: Ritz Holman LLP

AI Summary

Core Issue: Loan account balances were not fully reconciled between the subsidiary system and the general ledger.
Impacted Requirements: Regular reconciliations are necessary to ensure accurate financial reporting.
Recommended Follow-Up: Implement monthly reconciliations, promptly address discrepancies, and ensure management reviews and approves the reconciliations.

Finding Text

Criteria: The Organization utilizes a subsidiary system to maintain and monitor loan account balances. The subsidiary system should be reconciled on a regular basis to the general ledger control accounts. Condition: The loan receivable balances in the general ledger were not fully reconciled to the subsidiary system during the year. Cause: The Organization experienced a personnel turnover during the year which resulted in certain account reconciliations to be partially completed, and certain accounting processes and reconciliations were behind schedule. Reconciling items and differences were not identified and resolved in a timely manner. Effect: Without timely reconciliation procedures, loans receivable could be incorrectly reported in the financial statements. Questioned costs: No questioned costs were identified. Prevalence or consequence: Partial reconciliation of loan balances was performed, however the full reconciliation was completed during the audit process. Repeated audit finding: This is not a repeat finding. Recommendation: We recommend that reconciliations of loans receivable be completed on a monthly basis including identifying and correcting all reconciling items. The reconciliations should be reviewed and approved by management.

Corrective Action Plan

We concur with the assessment noted by the auditor. During 2023 there was significant staff turnover in the department which led to a significant delay in reconciling certain account and their related balances in a timely manner. We will continue to further review and augment staffing levels, continue our cross-training efforts, and reestablish internal account reconciliations of accounts, especially for the grants receivable, loans receivable and cash and related bank accounts. We will also refine our internal accounting checklists, work to ensure proper training of the accounting team, and have a responsible individual review and ensure account reconciliations are completed in a timely manner.

Other Findings in this Audit

498877 2023-003

Significant Deficiency
498878 2023-003

Significant Deficiency
498879 2023-003

Significant Deficiency
498880 2023-003

Significant Deficiency
1075318 2023-003

Significant Deficiency
1075319 2023-003

Significant Deficiency
1075320 2023-003

Significant Deficiency
1075321 2023-003

Significant Deficiency
1075322 2023-003

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
59.046	Microloan Program	$2.46M
21.020	Community Development Financial Institutions Program	$1.30M
21.024	Community Development Financial Institutions Rapid Response Program (cdfi Rrp)	$943,563
59.044	Veterans Outreach Program	$230,437
10.870	Rural Microentrepreneur Assistance Program	$176,993
10.351	Rural Business Development Grant	$127,303
59.043	Women's Business Ownership Assistance	$76,874
59.050	Prime Technical Assistance	$60,604
14.218	Community Development Block Grants/entitlement Grants	$50,000
21.033	Community Development Financial Institutions Fund Equitable Recovery Program (cdfi Erp)	$30,000